If you do anything this month with your finances, do this.

I promise it will be worth it.

You know the saying “the cobbler’s children have no shoes”? It means that an expert in one area often neglects that very area for themselves. And I will add that it’s embarrassing to admit that neglect. This saying has been true for me in that I don’t look at my own financial plan often enough. I do have one; it lives in my planning software, but I don’t open it up very often.

However, recently I did. I am contemplating a major change, and I know I have to take a hard look at my financial situation to move forward. I needed to be sure I was on solid financial ground now and well into the future to feel free to make some important decisions. Procrastinating would not do. I had to jump in and face the music, whatever tune would be played. If I didn’t, I know I would not move forward with confidence.

By the way, a major change or life shift is usually the reason people hire financial advisors. It’s the catalyst, the final push that gets someone to take the steps to find an advisor. So, I am not unusual, and financial advisors are really just like everyone else when it comes to their money. We procrastinate, we worry, we hope we are doing all the right things. The difference is we know what the right things are!

This is what happened when I finally sat down and did the work. And why I am suggesting that you do it too: I felt proud, free, focused, and validated. After I verified the inputs, tweaked the data, and reviewed all the cash flow reports, I realized that I was on track and I could proceed with my plans. I know that getting fully reacquainted with my finances will help me to make better decisions going forward.

You can do this too. Even if the outcome isn’t as rosy as mine, doing the work of planning is invaluable. Even more so if you are falling behind on your financial goals.
Maybe you take a look and realize that you haven’t been maximizing your retirement savings - you can fix that. Or, your spending on clothing was a little too enthusiastic last year, you can set a new budget, or you realize you need to update the liability limit on your umbrella policy because of a change in your wealth. I guarantee that the hours spent focusing on your full financial picture will be worth it for the peace-of-mind planning brings.

There are many ways to start or update a financial plan. You can have an advisor do it, build spreadsheets, or find free tools online.

The most important things are:
-Know what is coming in and what is going out - hopefully that balances, and the going out part includes savings, especially maxing out retirement savings opportunities.
-You don’t run a deficit that ends up on credit cards. If it does, you work hard to pay those off.
-Do projections to see if your nest egg will grow big enough to cover expenses in retirement (along with any other income, such as social security).
-Review all your insurance policies with your agents to ensure proper coverage (at least every 2 years).
-Review your estate plan to see if it is up-to-date. And if you don’t have one, do one.

Some of the surprises I found when updating my plan:

-I know most expenses go up every year because of inflation, but it’s always surprising to see how much. Especially lately, insurance premiums! I plan to shop around again to see if I can do any better.
-I focus so much on my clients' investment outcomes that I forget to look at my own. The rising stock market has certainly been a positive. Reminds me of the importance of rebalancing my own accounts.
- I was an enthusiastic shopper last year. I blame it partly on my newfound love of fashion substack. So many great writers with fashion expertise who share their style wisdom and find the gems out there! Time for me to reset the budget.

I hope this post gets you motivated to look at your own finances. January is as good a month as any to do it!

Photo by Tamara Harhai on Unsplash-


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