As a financial planner, I'm used to giving advice. So here's a look at the advice I'm giving myself in 2010. My resolutions include:
Review and update by business plan. I started my own business 3 years ago, and my financial future is very much tied to that business. I generally take the couple of weeks in early January to evaluate how I am doing relative to the plan I developed when I started the business. Based on that review I adjust my goals for the coming year keeping my long-term objectives in mind. One of the main benchmarks for the upcoming year will be to hire my first planning associate -- a major step that I am both excited and nervous about.
Rebalance my retirement portfolio. I review my retirement portfolio about 2 to 3 times a year to determine how far it has deviated from the target asset allocation. Asset allocation is the strategy of spreading your investments over a variety of different asset classes, and over a variety of investment vehicles and management styles within each class in order to reduce the risk of substantial loss in the portfolio. It is important that my portfolio consistently reflect my target allocation, otherwise it will become either more volatile or conservative than my long-term objectives. Market moves, time, and additions or subtractions from a portfolio make this difficult, so I let the calendar let me know when I may need to “rebalance” it back to my target allocations.
File my tax return early. How does the old saying go about the cobbler's children having the worst shoes? It's very much like that when it comes to tax filing time in my household. My poor wife always wonders how it is that I am scrambling to finalize our returns in early April. I have projected that we will be due a small to modest refund this year, so I promise to get the return in by mid-February so we get that money in so we can get that money in sooner.
What are your financial resolutions for 2010?