Setting Financial Goals for the New Year

By Katie Braun, Financial Advisor, Ameriprise Financial

Brookfield, Wis. - The start of a new year is a good time to dream big and set new goals. This is also a prime opportunity to step back, review your financial situation and make sure your finances are on track to help you achieve your goals.

Here are three fundamental steps to think through as you begin a fresh start in 2016:

Step one: Set concrete goals

One of the best ways to enhance the potential for building wealth and ensuring long-term financial security is having clearly defined financial objectives - and a plan to pursue them.

Typical goals include:
• Providing for your children’s education
• Purchasing your first home or a vacation property
• Having enough money to retire comfortably at a specific age
• Setting money aside to start a business

Contemplate what’s important in your own life, and try to put a timeframe and priority on those goals. Next, consider the amount of time available for you to save for each goal, and how much money will be required. For some goals (like saving for a down payment on a house), it may be easier to determine the amount needed and the timing of your planned purchase.

For other goals, like saving for education or retirement, more variables can come into play. Having a formalized financial plan can help you see how you’re progressing toward multiple goals over time. You can then adjust your strategies or priorities to stay on track.

Step two: Match your spending to your goals

The decisions you make with your money every day can affect your long-term goals. Yet it can be challenging to balance the comforts you want today with your big dreams for tomorrow.

Evaluate your typical spending pattern. How does your spending relate to the goals you established in step one? As you evaluate, consider the following questions:
• Are there ways to run your household more efficiently?
• Do you know how much you’re spending on education, activities and daily needs for your children? Many of us underestimate the amount spent in these categories.
• Are you mindful in making little purchases each day or week?
• Are you strategic in how you pay down student debts, borrowing or your mortgage?
• Do you make impulse purchases without carefully considering how these items fit with your long-term goals?

This year, resolve to periodically evaluate your spending every few months. Doing so will allow you to adjust where necessary to stay on track with achieving your goals.

Step three: Boost your savings

The most important way to improve your long-term financial position is to begin saving more and doing so consistently. Here are some specific priorities to consider:
• If you can participate in a workplace savings plan, do so. If your employer offers matching contributions, save enough to take full advantage of that valuable benefit. If you already participate in a plan, consider boosting your savings.
• Build up your emergency fund (cash that is easily accessible in a bank or money market account) so it matches at least three to six months of your income.
• Consider opening an IRA to build up personal retirement savings in a tax-advantaged manner.

Try to establish monthly contributions for each of these purposes, and set a reachable but meaningful goal for each.

When setting goals for the new year, many of us forget to consider the financial side of those goals. Think about how you’ll feel when you reach one of your goals and, then, how it will feel to be on track financially for your next goal. That feeling should inspire you to get your goal planning started today.

Katie Braun, a Pewaukee resident, is a Financial Advisor with Ameriprise Financial Services, Inc. in Brookfield, Wis. She specializes in fee-based financial planning and asset management strategies and has been in practice for 16 years. To contact her, please call (262) 785-1010, visit her office at 16650 W. Bluemound Road, Suite 800, or go to http://www.ameripriseadvisors.com/katie.braun/.

Ameriprise Financial and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser.

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