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Building Wealth

Your 2018 Year-End Financial Checklist

Finish strong financially in 2018 and set yourself up for a wealthier 2019.

December 14, 2018 • 3 minute read
BrightPlan Blog

Do you like “Year-End” lists? Best movies of the year, top songs of 2018, cutest animals. We like lists (and helping you plan), so we crafted our own year-end checklist for financial wellness.

By taking any of the steps below you can finish stronger financially in 2018, and set yourself up for a wealthier 2019.

1. Commit to Reducing Your Debt

As debt destroyer Dave Ramsey puts it, "You can wander into debt, but you can't wander out of it." Getting into debt is easy. Getting out requires a plan.

Whether your wandering involved a new set of wheels, some last minute holiday shopping, or an unexpected expense on a credit card, paying off those purchases frees up your money for other goals.

The first step is committing to paying more than your minimum monthly payments every month until that debt is gone. We recommend the Debt Avalanche plan, which puts those additional monthly payments towards your highest interest loans.

For guidance from now to debt-free, set up your debt reduction goal in BrightPlan. We’ll organize your loans and help you direct your monthly commitment to get out of debt faster.

2. IRA Contributions – Max It, Don’t Tax It

An Individual Retirement Account (IRA) may be one of the best savings vehicle for your future. Whether you choose the immediate tax benefits of a Traditional IRA contribution, or a Roth IRA which provides tax benefits in your retirement years, your 2018 contribution is very important.

The limit for the 2018 contribution is $5,500, and you can make yours until tax day: April 15th, 2019. If you don’t take full advantage of your maximum 2018 Traditional IRA contribution, you cannot make it up later. Every Tax Day the advantage expires for the previous tax year, and you cannot recover it in future years.

Even if you can't max out an IRA contribution for 2018, saving what you can right now lets you take advantage of all of the benefits an IRA provides. And while you’re planning for 2019, the maximum contribution will increase to $6,000 – so consider budgeting $500 a month for your IRA next year.

3. Put Your Investments on Autopilot

If you’re not investing automatically, it’s time to start.

Automatic investing is a simple and powerful tool to build wealth. Scheduling withdrawals from your bank to an investment account has major advantages over doing it yourself. It saves you time, sets aside money before you can spend it, and reduces the temptation of trying to time the market.

The easiest place to automatically invest is in a 401(k). If your employer has one, contribute at least enough to get the employer match. If you don’t have a 401(k), or want to invest for other goals, BrightPlan Investment Accounts make it easy.

Create your top goals in BrightPlan and let automation work it’s magic. Each goal gets:

  • its own investment account at TD Ameritrade
  • a tailored investment plan
  • advice on how much money to save each month

You don’t need to worry about selecting the right funds, rebalancing your portfolio, or remembering to make monthly deposits. Just commit once to invest in your future and BrightPlan makes it happen.

If you're already investing automatically, pat yourself on the back. Then take time to review your investments. If you got a raise this year, see if you can kick up your contribution by one or two percent to invest even more next year.

4. Pad Your Emergency Fund

An emergency fund is fundamental to your financial peace. Stuff happens in life – medical needs, insurance deductibles, accidents, car repairs. With an emergency fund, you're ready. Your other financial goals can stay on track and you avoid the high interest rates of using a credit card for an urgent expense.

If you already have an emergency fund, now is a good time to review it. Do you have enough set aside? The typical rule of thumb is to save 3 to 6 months of living expenses in a separate account to be ready for financial emergencies.

If you haven’t started an emergency fund, give yourself the gift of financial peace of mind this year. When you set up your Emergency Fund goal in BrightPlan, we’ll advise you on how much to save and how to invest your cash reserve.

You probably won’t fund it overnight, and you don’t have to. But begin building your safety net by opening a separate account and setting up a small automatic contribution each month.

Take a Step Towards Financial Wellness in 2019

BrightPlan was created to help make your life better with financial tools and resources. The more prepared and focused you are for your future goals, the more you can enjoy today.

Thank you for allowing us to help you this past year. We hope you have a joyful and peaceful holiday season and look forward to a great 2019.

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