3 Financial New Year’s Resolutions You Need to Make Right Now

Stop wasting money and start straightening your portfolio.



Perhaps you behaved yourself this holiday season and held back from that second serving of Grandma’s delicious pie. Maybe your plate was filled with sensibly-sized portions at the multiple feasts you were invited to from Thanksgiving to New Years. Congratulations if you showed restraint.

But did you also watch your finances? If you’re like most people, you headed out on a last-minute spending spree for holiday presents and went over your budget. Also, the holiday season tends to be a time when we spend extra on food, drinks and other entertainment — leaving us with nothing but the credit card bills come January.

So I’m offering three simple financial resolutions for the New Year to improve your fiscal fitness as we head into 2016.

1. Track your expenses. The first rule of financial success is perhaps the most simple: spend less than you earn. We’ve all heard the story of the lottery winner, pop star or retired athlete who had millions in the bank only to file for bankruptcy within just a few short years. (M.C. Hammer immediately comes to mind.) That’s because they didn’t follow rule No. 1 and they let their spending get away from them. Of course we’re all not over-indulgent lottery winners, but my experience working with financial planning clients tells me that the majority of us don’t really have a crystal clear picture of our expenses. So make 2016 the year that you get that clear picture, and it doesn’t have to be complicated.

There are plenty of great free tools out there to help you track your expenses. The best one is the one that’s convenient for you and easy to use. Consider trying out one of the online aggregation tools that can give you a complete picture of your finances and may even offer an automated expense tracking feature. For something even easier, I often suggest simply writing down all of your daily expenses on a calendar and hanging it on the fridge. Do this regularly for a couple of months and you’ll soon have a much clearer picture of where all of your money is flowing, making it much easier to maximize savings or to budget for special events.

2. Reevaluate your portfolio. Let’s be honest. When is the last time you truly reevaluated your portfolio? For many investors, the last time they took a long, hard look at their portfolio was either when they first started investing or when they last opened a new account. It’s quite possible that the conditions that existed then have since changed, whether those changes are to your personal situation or to the investments within your portfolio. Regardless, you’re due in 2016. There are a lot of great tools out there to help make the process easier than it’s ever been before. Consider enlisting the help of a professional this year who can provide you with a neutral, unbiased opinion on the current state of your finances and your investment portfolio.

3. Set aside a separate account for gifts to charity. One of the most common year-end rushes in the financial world is last-minute charitable giving. All too often, clients wait until the last weeks of the year to make their gifts and frequently find themselves scrambling to set up the proper authorizations or sending paperwork back and forth at substantial overnight expense and with the risk of potentially missing deadlines. Don’t put yourself in this unnecessary position this year. As you prepare your taxes over the next couple of months, take the time to set up a separate account to fund this year’s charitable giving.

If your charitable intent is relatively modest, you can easily set up and link a free checking account to your investment accounts. With the banking authorizations in place, you can easily move money from one account to the other. And with a dedicated checking account for making charitable gifts, you have an easy way to track all of your donations for next year’s taxes.

Perhaps you’ll find yourself making more substantial gifts to non-profit and charitable organizations this year. If so, consider setting up a Donor Advised Fund (DAF). DAFs have really grown in the past decade and offer a convenient way to coordinate all of your charitable giving into a single investment account. Like other forms of gifting, the busy season for companies sponsoring DAFs is the last few months of the year, so if you find yourself making larger and perhaps more regular charitable donations, this tax season is the perfect time to get ahead of the game.

With your spending in control, your accounts set up for year-end charitable donations, and your portfolio refreshed according to your current needs and future goals, 2016 will be all set to be your most fiscally fit year ever.

Martin Schamis is the head of wealth planning at Janney Montgomery Scott, a full-service financial services firm, providing comprehensive financial advice and service to individual, corporate and institutional investors. It’s headquartered in downtown Philadelphia.

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