New Year, New You

Question:  Can you recommend any financial tips and new habits to incorporate into my 2022 New Year resolutions and goals?

Answer: Starting the New Year with self-improvement in mind is always admirable. Here are five financial resolutions that are well within reach, especially with a little professional guidance.

1. Measure the Value of Your Life 

If someone depends on your income and you have debt, it may be appropriate to review life insurance coverage. According to the 2021 Insurance Barometer Study, only 47% of women have life insurance versus 58% of men. If there is a legitimate need for it and you don’t have life insurance, it’s worth a conversation with your trusted advisor to help you determine how much coverage you may need if you need it at all. Determining your replacement value is a daunting task and there are considerations that go beyond your W2 income, like unpaid household labor such as   laundry, childcare, caring for parents, cooking, and cleaning. If you do have protection, revisit the policy. 

2. Put Yourself First

Many of us are caregivers for children and senior family members. This may mean setting aside some peak earning years to do so. Because women generally live longer than men, and still tend to make less throughout their lifetimes, retirement savings often suffer, and women may find themselves trying to play catch-up in later years. Think of your financial well-being in the same way we’re told to put your mask on first in a flight emergency. Prioritize safeguarding your retirement savings for the future ahead of other demands. Reexamine how much you’ve saved and how much you’ll need to retire the way you envision. 

3. Budget to Lighten the Load

Prioritizing work, family, and leisure is challenging. Laundry, groceries, and yard work are all chores that can compete for the time we’d rather spend with friends and family. If you’re looking to create more balance in life, it may be time to dial back on how many chores you handle. It happens to all of us - someone runs out of clean socks or the fridge is low on food. Laundry and grocery shopping don’t take care of themselves, so this may be the year to consider outsourcing some of the more routine and time-consuming chores to provide more equilibrium to your work-life equation and get meaningful time back in your life. This means setting aside funds for this purpose in the 2022 budget. 

Heading into 2022, make a list of the chores that you dread the most and take the most time and calculate how much it would cost to outsource them. Apps like TaskRabbit, Thumbtack and Handy* allow you to book services only when you need them, instead of making a regular commitment to outsource.

4. Give Back

One silver lining from the pandemic is that charitable giving is up. According to the Giving USA report, Americans gave more money to charity in 2020 than the previous year. Philanthropic donations were up 5.1% year over year, or a 3.8% increase when adjusted for inflation. Despite the financially challenging year some faced, the desire to help was high. Studies show single women, holding consistent income and wealth, are more likely to give to charity than single men. If generosity feels good, work with your trusted CERTIFIED FINANCIAL PLANNER™ professional to create a plan to incorporate kindness and caring into your finances. Create your giving goals, vetting specific institutions, at the beginning of the year to allocate donations accordingly. Earmarking a certain amount at the start of the year allows you to be purposeful with your giving and align it to your values. It will also ensure you’re maximizing tax benefits.

5. Continuously Monitor 

It’s important to regularly assess your financial health to make sure your newly formed goals match changes in your financial life. Include your partner, spouse, and financial advisor in these discussions from the start and all along the way. The goal is to remain in touch with your finances, objectives, and goals while making necessary modifications.

Even if you don’t make formal resolutions, these healthy financial habits are something to keep in mind throughout the year. We wish you a New Year full of wishes for health, compassion, and contentment. Stay focused and plan accordingly. 

*Raymond James is not affiliated with the phone apps mentioned above.

The opinions expressed are those of the writer as of December 19, 2021, but not necessarily those of Raymond James and Associates, and subject to change at any time. Past performance is no guarantee of future results. Material is provided for informational purposes. These views should not be construed as a recommendation for any specific sector or security. Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices. Consult your tax professional and financial advisor before making any investment decisions.

“Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.” This article provided by Darcie Guerin, CFP®, First Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at (239)389-1041, email darcie.guerin@raymondjames.com Website: www.raymondjames.com/Darcie.