If improving your personal finances is among your resolutions for 2001, you need to break down your goal into manageable tasks. Resolving to lose 25 pounds doesn’t mean doing it all in January; likewise, achieving financial fitness requires a month-by-month plan.
January
Pay down your debt
If you’ve run up large credit card bills during the holiday season, your first financial resolution for 2001 should focus on paying down your debt. Review the interest rate and terms on outstanding loans and credit cards to identify opportunities to restructure debt at more favorable terms. Then, work out a realistic repayment plan and stick to it.
February
Set long-term financial goals and save for them
Whether establishing a college fund for your children or planning the vacation of a lifetime, concrete objectives form a solid foundation for achieving your goals. Prioritize your list of objectives and assign your top goals a dollar value and a target date. Determine how much you need to save each month to achieve your goals and devise a specific plan for doing so.
March
Get ready to file your taxes
To avoid last-minute income tax-filing panic, begin gathering tax-related receipts and documents now, and make an appointment with your CPA or a tax adviser to help minimize your tax liability.
April
Fund your retirement
April is a great time to think about the tax benefits of retirement plans. You can make your Individual Retirement Account contribution for 2000 by April 15, and those who qualify can claim a deduction on their 2000 return. If your company has a retirement savings plan and you’re not a participant, sign up now, so you can start to benefit from tax-deferred savings.
May
Automate your savings
Now that Uncle Sam has been taken care of, it’s time to pay yourself . When you sign up with an automatic savings plan through your payroll department, the dollar amount you choose is deducted from your paycheck and sent to the mutual fund or other investment destination of your choice.
June
Learn more about personal finance
June is a great month to sit in the sun and read books and magazines about personal finance. If you stick to reputable sources, you can also find excellent financial advice on the Internet.
July
Review your investment portfolio
Mid-year is an opportune time to check on your asset allocation. Changes in the performance of your investments could mean you need to rebalance your investments in line with your goals and tolerance for risk.
August
Check insurance coverage
Check out your home, health, car, life and disability policies to determine whether there are any gaps in coverage. Talk to your agent to see if you can obtain more effective coverage by increasing or reducing deductible amounts on your policy. Also inquire about any discounts that may be available for taking special safety precautions such as adding an alarm system to your home or car.
September
Get organized
Back-to-school time is an excellent time to organize important financial papers and legal documents. Also consider investing in financial software that can help you keep track of your finances and monitor your progress.
October
Prepare or strengthen your estate plan
An estate plan should include a will. It’s also important to consider a durable power of attorney, a living will, and living or irrevocable trusts. You should also review how your property is titled and what measures you can take to minimize estate taxes and probate costs.
November
Take advantage of year-end tax savings strategies
Make charitable contributions. Consider whether it makes sense to offset capital gains with capital losses. Plan now to delay income and accelerate deductions. Check on your flexible spending accounts at work and make plans to spend unused funds.
December
Calculate your net worth
Add up all your assets (what you own) and subtract the total of your liabilities (what you owe) to determine your net worth. By doing this each year, you can chart your progress and watch your assets grow.
Prepared by the Nevada Society of Certified Public Accountants
