December 17, 2019
Year-end is a busy time as clients want to meet to wrap up the year. While many are interested in discussing how their portfolio has performed, most are eager to set their “Financial New Year’s Resolutions”. Oftentimes good investment performance can lead to resolutions of splurging, whether that be throwing a large family party or a big vacation to commemorate a milestone birthday or anniversary. Sometimes our clients’ resolutions are simply to straighten up their financial homes. For example, my client recently forewarned me that she’s serious (this time) about getting a better handle on her monthly spending. We discussed utilizing one of the many systems available: computer programs such as Quicken or Mint.com, building a spreadsheet, or using an old fashioned notebook to track every single expense. I often recommend purchasing the system in November or December to ensure that it is in place for January 1. After all, most people don’t wait to purchase their annual planner during the second week of January because they don’t want to miss sending cards for the early January birthdays, etc.
Resolutions for the new year often include the dreaded task of reviewing (and possibly updating) estate documents. Clients will insist that nothing has really changed or that they are still healthy. Ironically, when we dust off their existing estate documents, clients are often shocked to see a now deceased relative named as their executor…or worse yet an estranged friend named as the guardian for their children. For many of my suddenly single clients, we immediately review the beneficiary designations to ensure that an ex-spouse is no longer the primary beneficiary of a retirement account or life insurance policy (unless required under the divorce agreement). In conjunction with these decisions, we will review those named in financial powers of attorney and medical directives. Following a divorce, clients typically prefer to name someone other than their ex-spouse as the person making medical decisions on their behalf.
With the new year right around the corner, now is a great time to make the list of your priorities and develop a meaningful financial resolution.