Do You Need a New Financial Plan in the New Year?

Memo Book with "Savings Plan" written on frong
(Adobe Stock)

Just a month before the pandemic raged onto the scene, I opined on the importance of breaking down big New Year's resolutions into small pieces. While a lot has changed, knocking out your goals one small step at a time remains a solid approach. This year, I'd like to focus on something I've talked a lot about recently: A pandemic reset.

The pandemic has dragged on to the point where -- in many ways -- our new normal doesn't look very similar to the old. With all that change, where do your finances stand, today? We've all grinded it out over the last couple of years. However, sometimes during a head-down grind, you can lose sight of the bigger picture. Below, I lay out six questions I think are worth addressing.

  1. How has your insurance been impacted? A job loss, career change or new employer benefit package may have altered a variety of different types of insurance. The financial challenges of the pandemic might have caused you to adjust your coverages. Now is a good time to take a top-to-bottom look at what you have and address gaps or shortfalls.
  2. How has your spending plan held up? I'm sure there is a whole lot about the pandemic we can all agree will be nice to put far in our rearview mirror. However, specific to spending and spending plans, there have been stimulus checks, advance child-tax credits and proactive moves with our finances that we can build on. Evaluate your own budget, toss the bad, embrace the good and move forward.
  3. Does your estate planning need a refresh? The grim nature of the pandemic has caused many families to evaluate their plans and preparations for the inevitable. Wills, trusts, powers of attorney and beneficiary designations may all be part of what you've already looked at, or need to.
  4. How's your credit? Regularly reviewing your credit report for inaccuracies ( should be part of your financial routine. And with as much fraud as we've seen through the pandemic, it's even more important.
  5. Is your cash reserve in need of a recharge? No doubt there have been numerous financial shocks that could have depleted even the robust emergency fund. Where do you stand, relative to maintaining the equivalent of three to six months of regular expenses? Now could be a great time to focus on a rebuild.
  6. Were your plans for retirement affected? During the pandemic, I met plenty of folks who shifted to defense. They reduced what they were saving for retirement. Millions also took advantage of special rules to access their retirement accounts. Put all this together, and it's time to reassess where you stand, relative to retirement plan contributions, savings plan-of-action, portfolio rebalancing and the like. With all the talk of changes to the tax code, you might want to evaluate your retirement savings through that lens.

All that, and I didn't even touch on the biggest question. Have your goals changed? So I'll end in a place where your plan should begin. It's a New Year, so there's no time like right now to reinvent the new you! Happy New Year.

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