The New Year is a great time to take a good look at your financial status and take necessary steps to achieve both short and long-term investment goals.

Will Stone, CERTIFIED FINANCIAL PLANNER™, of McMullin Stone & Associates in Fayetteville recommends 12 financial resolutions for the New Year.

“We have 12 resolutions because sometimes people don’t want to do everything at once,” Stone says. “So, we recommend you do one a month.”

Here are the top three financial resolutions for 2020, according to Stone.

  1. Get your financial scorecard in order.  

Much like businesses have balance sheets, each person or household can create a financial scorecard by looking at the things that they own and subtracting the things that they owe, Stone says. For example, investment accounts, retirement accounts, bank accounts, the house that one lives in or a vacation home are all things that people own. Credit card balances, car loans, and mortgages are all examples of things that people owe.

Getting your information up to date doesn’t have to be complicated. It can be done on a single sheet of paper, with assets on one side and liabilities on the other.

“If we take the things that people have minus the things that they owe, we come up with net worth,” Stone explains. “We want that to be a positive number that increases over time. The higher that number is and the lower the items that one owes becomes, the more financially independent someone grows.”

  1. Evaluate your cash levels.

Financial planners normally recommend that clients have three to six months of living expenses in cash, Stone says.

“For folks who are retired, we recommend that they have more than that in cash, particularly if they’re using their investment accounts to supplement their income,” he says. “The reason is that when the financial markets go into a decline, we want to make sure there’s enough cash set aside so that living expenses or vacations come from that fund instead of cashing in investments at any kind of loss.”

Stone says that right now — when financial markets are near record highs and in a long-term upward cycle — is a good time to reevaluate if more cash is needed. In this market, clients have been able to sell some of their investments at a gain.

“It’s about making sure that you have enough of an emergency fund and putting discipline into your investment strategy when you can.”

“When we look at a person’s cash levels and determine that there needs to be an adjustment there, the next natural step is to look at the investment portfolio and see if that needs to be rebalanced,” he explains. That brings us to the third financial resolution.

  1. Revisit your portfolio’s risk level and investment mix.

This goal is particularly important for retired persons, says Stone, because the time until they need these funds impacts what their investment mix should be, whether it’s conservative or growth or a blend of the two.

For example, if certain things in a client’s portfolio have increased their investment risk, then selling off those investments when markets are high is a good way to rebalance the overall portfolio.

An additional “bonus” tip for the new year, says Stone, is to review your named beneficiaries on life insurance policies, annuity contracts, retirement accounts and the like.

“People often establish beneficiaries when they first open accounts and then rarely revisit them. We’ve seen cases where clients have had spouses, parents or siblings pass away. Sometimes they simply change their mind about who should inherit their assets. The new year is a good time to make sure all your beneficiaries still make sense.”

Stone admits that many of these resolutions may seem overwhelming and can take a lot of time to work through.

“That’s our role at McMullin Stone, to help people who feel like they don’t have the time or expertise or inclination to work through all these things and make sure that their financial life is set up to help them live the life that they want to live.”

To get the full list of 12 Financial Resolutions for a Successful New Year or to learn about the services offered through McMullin Stone & Associates, email Will Stone at will.stone@mcmullinstone.com or call 770-471-6674.

About McMullin Stone & Associates

McMullin Stone & Associates is located at 101 Devant Street, Ste 903, Fayetteville GA 30214.  Securities offered through Raymond James Financial Services, Inc. member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.  McMullin Stone & Associates is not a registered broker/dealer and is independent of Raymond James Financial Services.

Investing involves risk and you may incur a profit or loss regardless of strategy selected. Any opinions are those of the author and not necessarily those of Raymond James. Re-balancing accounts could trigger tax events