Starting off on the right foot: New Year's (Financial) Resolutions

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Yourefolio Estate and Legacy Planning Software

Published on January 15, 2019

Kameron Helmuth, CFP®,AWMA®

What comes to mind when you think of the New Year? Most think of the traditions like staying up to watch the ball drop in Times Square, spending the evening with family and friends watching celebrities lip syncing our favorite songs and the infamous...New Year's resolutions.

In a recent survey; over 60% of Americans say that their top resolutions are to live healthier, reduce stress, or to improve their finances by saving more or spending less. Here a 4 simple steps to assess and (hopefully) improve your finances in 2019.

Step 1. Start by taking inventory.

It's a good exercise to calculate your net worth each year by adding up all the assets you own and subtracting all of your liabilities. The normal assets you would include are things like your home, vehicles, retirement accounts, or investment real estate. Normal liabilities include your mortgage, car loans, credit card debt and student loans.

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For all my Dentists, Doctors, and Business Owners. Be sure to include business assets such as your practice value (include some goodwill) or real estate and liabilities on the business including practice loans or equipment loans. TIP- Dust off your buy/sell agreements and any life insurance/disability insurance you have to make sure they're up to date.

Step 2. Assess your goals.

Get together with whomever you make decisions with whether it's your significant other, business partner, etc. and think about your short, medium, and long term goals and write them down. Can you still take that dream vacation or make the charitable gift you've always wanted? More importantly; if you're not on track what are you willing to do this year to get back on track?

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Step 3. Manage your taxes.

We all rely on our CPA's to prepare our taxes. If we're really lucky we may work with a CPA that does tax planning. Ultimately; it's up to you to manage your taxes on an ongoing basis. Learn what you can about the tax changes and how you can plan to take advantage of them. For instance; did you know you can put more money in your retirement plans in 2019? (Healthcare Businesses, Attorneys, Engineers, Architects listen up) Do you know what the "Qualified Business Income Deduction" for pass-through business entities is and if you qualify? Ask questions and learn what needs to change in your plan to take full advantage.



Step 4. Put it into action. It's go time!

Be sure you have the right team

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Be sure you have the right people around you. Start with the basics: a good CPA, Attorney, Banker, Insurance agent, and Financial Planner. Be sure that the team you work with understands your business and that they all work well together to look out for your best interest.

If you're missing someone from your "trusted advisors" list be sure to seek them out or ask for a referral to one.

Most importantly make 2019 a great year for your business, your family and your community!