If your New Year’s Day list includes these 3 things:

  1. Nurse a hangover
  2. Take down holiday decorations
  3. Return gifts

you’re probably not alone.  But what about doing something different, something that could actually improve your future life?

Here are 3 smart and simple things you can do to get off on the right financial foot for 2019:

  1. Update your balance sheet.

Balance sheets can get a bad wrap for being tedious or boring, but if you think of it as your “master plan” or “blueprint” for building your financial future, it may help to change your thinking.  Your balance sheet is basically a list of all your assets (home, retirement accounts, etc.) minus your liabilities (loans, debts, etc.).  Kept and updated year after year, it shows you how far you have come, and where you may be going.  Pretty powerful tool!  (If you’d like a template to get started, please send me an email.)

Once you’ve updated your balance sheet, you can take a step back and ask yourself: what has improved over last year?  (Maybe you’ve paid off a debt or maxed out an IRA.)  Next, regardless of how 2018 turned out for you, you can ask: what can I focus on in the coming year?  (Perhaps setting up biweekly mortgage payments to save on interest, or updating your will.)

2. Get ready for tax season.

You should start receiving tax forms in late January/early February.  Many companies have now gone digital, so be on the lookout for emails from your providers, not only snail-mailed forms.
If you work with an accountant or CPA, be sure to collect all forms and get them to your professional in a timely manner.  Some CPA offices provide a checklist to help you out.  If you do your own tax reporting, you can still create your own checklist to make sure you don’t miss anything.  Some software providers like TurboTax or H&R Block also help you out by providing online FAQ’s and video help.

3. Make last-call IRA contributions, if you haven’t already maxed out your IRA’s.

This includes “back door” Roth IRA contributions, if you have priced yourself out of Roth eligibility in 2018 (if you are a single-filer, that would mean your Modified Adjusted Gross Income is above $135,000; if you are married filing jointly, that would mean your MAGI is above $199,000).
How much can you contribute?  If you have reportable earned income for 2018, and are below the above-mentioned limitations, you may be allowed to contribute $5,500 if you’re under age 50, and $6,500 if over age 50 in 2018.  Good news!  These limits were increased (ok, slightly) for 2019. Next year, you could contribute up to $6,000 under age 50, and $7,000 over age 50 (according to the IRS).  Please keep in mind this total is across all IRA’s you may have.

Unsure about where you fall or what you should do?  Send me an email!  You need to know and utilize these important financial tools.

Even doing just one of the items above can have a profound impact on your financial health and peace of mind.  Doing all three can get you off to a great start for 2019, and beyond.

Happy New Year!