Michael on December 15th, 2008
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Today’s the final year-end post.  Earlier posts on this topic include using your FSA funds before losing them, maximizing your match in December, taking tax advantage of any capital losses, and year-end IRA considerations.

So where are you?

You: Me?


You: I’m right here.

No, I know that. I mean where are you financially?

You: I was hoping you could tell me.

I get that a lot, and I do look forward to meeting you one day either at an upcoming seminar or through a Total Candor membership program.  But you need to take the first step yourself.

Many people find the period at the end of December, particularly after Christmas and before New Year’s to be comparatively slower than the rest of the year.  Coincidentally, New Year’s resolutions are made around that time and typically refer to actions we intend to take in January. Then January comes around and, with it, a pick-up in the schedule causing many of the things we’d hoped to get done to once again fall off the radar screen.

I have a proposal.

Instead of taking the time to come up with resolutions in late December that will be gone by late January, use that time, perhaps an hour or two, to review your personal finances. Ask yourself the following questions:

  • What are my near-term financial goals?
    • Real emergency fund?
    • New house?
    • New car?
    • No credit car debt?
  • What about long-term goals?
    • Greater security for retirement?
    • Funding for children’s education?
  • What have I saved?
    • Where is it?
    • What is it invested in?
    • Should it be?
    • Is it enough?
    • Am I comfortable/thrilled/upset that this is what I have saved given my annual income and age?
  • What do I owe?
    • To whom?
    • Was it worth it?
    • What’s the interest rate?

You get the idea.

You: You said an hour or two.  This seems like a lot more work than that.

It’s not.  Trust me.  Fixing problems might take longer than an hour or two, but understanding your situation, for real, won’t take very long at all.

You’ll never improve your financial lot in life if you don’t even know where you are starting from.

Personally, I think the end of the year is the best place to begin.  Your thoughts?

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