January Client NewsLetter

Happy New Year!  We have finally made it to 2023 and although it may not feel like a lot changes with the start of a new year, and a lot might not change, a new year gives us a point of time to reflect on the last 12 months and dream about the next 12 months.  It seems like so many new years start out with great intentions for self-improvement but we quickly get swallowed up by the same routines of life and find ourselves carried away without making any meaningful changes.  Let’s make a change for this year and fight the status quo so that we can change and improve our lives in 2023.  What might that change be for you?  Is it health related, money related, education related, career related, family related….?  Everyone’s change is different but just as important.  Whether large or small, let’s try to accomplish our goals in 2023.  One thing that I have found is that by having someone in my life who will hold me accountable to the change I want to make, I become more successful at making that change.  Do you have that someone in your life?

For your financial journey, I want to be a part of that team that helps keep you accountable to accomplishing your own statement of financial purpose and achieving your dreams and goals along the way.  I will be reaching out to you in order to just check in and see if there are any big changes coming in the months ahead that may require a conversation and planning to make sure everything stays on track.

I would be remiss if I did not mention the Secure Act 2.0.  There are some pretty big changes that will go into effect because of this, and I will address this in a separate email later this month.

Here’s to the hope of a new year with new opportunities, excitement, and challenges!  Let’s make it another great year.

January Element Focus is….Burn Rate

Spending habits affect your ability to save and pay down debt. It affects your ability to make work optional. It affects the amount of insurance you should apply for. It affects the risk you should take in your investments. And in Elements, it’s one of the main inputs into several other Elements scores (the “Term” scores).

So, tracking spending is an essential part of your financial health, and accurately knowing a your spending habits could be the single most important piece of financial data. At the same time, I know it can be difficult for you to provide an accurate spending number.

How can we resolve this?

What’s important here is simply awareness of spending habits, be it the absolute dollar amount or where the money is going.

Often we conflate budgeting and tracking. “Budgeting” is a specific spending plan, whereas “tracking” is awareness.

Budgeting is optional. Tracking is necessary.

The reality is that healthy spending doesn't always require detailed budgeting. But at a minimum, you should track your spending habits over time. This helps you truly understand where you are, how you got there and what needs to change.

I will be reviewing your Br (Burn Rate) score and reaching out to you if there are opportunities questions, or challenges that may need to be addressed.  As always, if you would like to review this in greater detail, please schedule some time using this link https://calendly.com/ssfp/lets-talk.

January Planning Opportunities

Employer Plan Contributions - One of the easiest ways to save for your future retirement is by contributing to you employer provided retirement plan (if your employer provides one).  Most large employers offer a plan and a lot will offer a matching contribution if you meet certain criteria.  I have found that the beginning of a new year offers a great opportunity to look at increasing your contribution amount to your employer plan by a percent or two and that by doing this in small increments you will not miss the additional savings as much as trying to step up contributions in large chunks.  This is also a good time to start considering if you should be utilizing pre-tax or post tax options.  If you have questions or would like to explore your employer plan contributions more, give me a call or schedule some time using this link https://calendly.com/ssfp/lets-talk.

Budgeting and Cash Flow - If you haven’t been able to tell yet, January holds a big focus around cash flow and budgeting (tracking).  It is important that we have a solid understanding of what your cash flows are projected to be for 2023 and what your expenses are projected to be.  The best way to begin to estimate this (if you don’t use an app like Mint) is to look back at your W-2’s or 1099’s, your bank statements, and credit card statements.  This doesn’t need to be a detailed accounting of every transaction, but it should be a complete look at the money that goes in and out each month.  Your cash flow (both in and out) is the foundation for a lot of the other planning we will do throughout the year.  If you have questions or need help figuring out what your monthly cash flow is, please reach out soon.  You can schedule some time with me by using this link https://calendly.com/ssfp/lets-talk.

Client Actions

The good news is that you may or may not need to do anything with this.  However, if you are one of the many that are required to file quarterly tax estimates, please know that these are due on January 15.  If there is any information that you need or anything that I can do to assist you with this, please let me know.

Happy New Year!  It is hard to believe that it is 2023.  Where does the time go.  What does this new year have in store for us…I have no idea and my crystal ball has never worked.  What I do know is that staying focused on your statement of financial purpose and investing for the long term works.  As the markets moves and as the economic cycles change, staying focused on what matters most is what will get you through.  I know that 2022 was a tough year in a lot of ways, and there isn’t a lot of evidence that the start (or even all) of 2023) is going to be a lot different.  As questions arise, as concerns come, as your life journey changes, please reach out and let’s walk through another year together focusing not on just the here and now, but the big picture and the journey that we each are on.  If you have any questions, concerns, fears, or just want to chat, please do not hesitate to give me a call.

Here’s to a great January and a great 2023!