New Year New Financial Plan

A new year means new resolutions, and this year is about making resolutions to increase your financial fitness. Each new year brings the opportunity to start fresh and reevaluate your fiscal strategy. A foundation for a financial plan comes with knowing the steps to take to help you save, invest, grow your wealth and prep for the future. Here are some steps you can take to create a path towards a new financial future and achieve more of your goals.

Consult a Financial Advisor

A financial advisor is a key asset to creating a sound financial plan. Here are some reasons you should consult a financial advisor.

  • Receive a second opinion on your financial portfolio from a professional.
  • Financial knowledge is provided based on trends and risk tolerance.
  • Personalized tax benefit options are recommended that align with overall financial goals.


Be sure to track your budget each month and evaluate a few times a year for adjustments that help reach your financial goals. The following items are important to track and are recommended by investors.

  • Consider paying yourself first by prioritizing savings when allocating funds in your budget by setting aside 20% of your income as your budget allows.
  • Set goals for big budget items such as down payments on a house or luxurious vacations. The way to achieve these goals is by setting attainable monthly savings with a realistic time frame so you are not discouraged from sticking to the plan.
  • Prioritize saving for retirement by ensuring you are taking advantage of different plan options, including employer provided 401K/403B plans, Individual Retirement Accounts (Traditional or Roth) and stocks or mutual funds.
  • Build an emergency fund into your budget to prepare for a large unexpected bill so you aren’t financially strained.

Manage Debt

Explore your debt and work to start decreasing the amount you have in your financial portfolio. One of the priorities to consider when decreasing your debt is to stop adding to it by eliminating the need to utilize credit cards by living a cash-only lifestyle.

  • Keep your debt manageable. Be sure the payments that need to be paid each month fit within your current budget.
  • If you have too many high-interest payments, consider consolidating your debt. You could lower your interest rate with a personal loan so your debt is spread into convenient installments.
  • Seek payment terms that align with your future plans. One example of a payment that could be adjusted is a home loan. If you plan to be in a home for less than five years, consider an adjustable rate mortgage as it provides a lower interest in the short term, and can help you allocate fewer funds to your mortgage debt.

Diversify Your Financial Portfolio

Most of us have heard the concept of not putting all your eggs in one basket. Ensure you diversify your financial portfolio, as this will help mitigate financial pitfalls. Evaluate your plan twice a year to adjust for future projections as opposed to only considering prior trends.

  • Study up on the best options for your financial needs considering stocks, bonds and cash saving options.
  • Modify risk tolerance options as time progresses, adjusting for short term and long term goals. Risk management is feasible with the help of solution oriented goals.
  • Consult a tax advisor to take advantage of tax deductible accounts.

Prep for the Unexpected

The potential for unexpected surprises such as loss of income, illness, disability or death is more prevalent as time goes on. The most recent pandemic brought to light that most of us are unprepared for a big financial flop.

  • Health insurance helps provide medical security for you and your family if you have a sudden medical ailment. It will help break down costs of medical expenses, so you don’t pay a lump sum out of pocket, creating a financial burden.
  • On average, the chances of becoming disabled are more common than a sudden unexpected death. To prepare for a sudden disability that could leave you unable to continue your current employment, opt for a long-term disability plan to help mitigate a potential loss or reduction of income.
  • Most homeowners are aware of the burden home repair expenses cause in the event of a fire, pipe burst or other damages. Being prepared with property insurance to help cover the cost of the expenses will ensure that when damages occur, you don’t have the financial weight of paying out of pocket for all of the costs endured.
  • Preparing for retirement is important when considering the typical costs of daily life. As you prepare for retirement, consider that you may need more support than originally anticipated. Long-term care insurance helps cover expenses that come with a chronic medical condition, disability or disorder. As we age, we have to reflect on the extra care that may be needed.
  • Although we don’t like to reflect on the potential of a sudden death in the family, it’s best to be prepared with life insurance. Life insurance helps protect your family after the loss of a loved one by allowing them the opportunity to pay for burial expenses and make up for the income lost that covers everyday living expenses.

Disaster Plan

Strive to create a disaster plan in case of an emergency, such as an evacuation of your home. When you have a sudden emergency, it’s difficult to remember which documents to grab or save before leaving your home.

  • Have a prepped locked container that holds important documents, including birth certificates, passports, wills and/or trust documents so that you can transport them with minimal work. A secure fireproof and waterproof container is best for storage.
  • Consider a portable drive with an inventory of scanned important documents to minimize the amount of paperwork and digital copies of other resources.
  • Outline a will and/or trust to help allocate your funds and assets to appropriate parties to ensure they have minimal regulatory obstacles when trying to use the financial resources.

Start the year off with a sound financial plan that helps you reach your goals. If you need help finding a reliable financial advisor, please visit our website to find one in your area. Each advisor has years of experience, and complimentary consultations are available to SDCCU members.

Visit our Financial Knowledge Blog to learn more tips on setting up a solid financial future or join us for Financial Wellness Wednesdays.