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Your 4-part plan for financial health in 2023

If you are looking to set or attain financial goals this year, these four areas are where I recommend you start and the metric that I recommend to adjust your current plans and aims.

PROTECT

It is important to protect what you have, as well as those you love. The experiences of the past few years — COVID-19 and lockdowns, stock market losses and rising interest rates — have taught us many things, but primarily that the future is uncertain; we must keep the people and things we value safe.

What steps have you taken to protect what you value? Here are a few I recommend.

• Review or establish a budget. I talk about this often. You can’t manage something you are clueless about. No one, not your spouse, financial professional or CPA, has the ultimate responsibility for your money — you do.

• If you have investments or a retirement plan, review them annually at a minimum. Are you a financial risk taker, or are you risk averse? Have you ever done a risk-tolerance assessment to help you know? Many people don’t know how their 401k is invested and are shocked to learn their strategies don’t align with their personal risk tolerance.

• Review your life insurance program. It always baffles me that people are more than willing to purchase insurance to protect their automobile or homes, but they don’t see the need to protect the ones they love through life insurance. Do you care what their financial future would be if your income was suddenly gone? In addition to the death benefit, today’s policies offer living benefits that can be accessed in the case of chronic, critical or terminal illness. These benefits can help avoid financial devastation should you experience a life-altering medical event. One aspect of life insurance that is overlooked is that it can protect those you love by allowing them to grieve free of financial stress.

SAVE

Do you have one, two or three months’ worth of expenses in savings? Do you have an emergency fund? If you don’t, you should. However, I don’t encourage anyone to start an investment plan until they have money in savings. It’s great to have money in a retirement plan, but if you need new tires on your car, what will you do?

MANAGE DEBT

Debt can be your friend or your foe, as there is good and bad debt. If debt is preventing you from saving, it is time to seek help. Don’t ask for assistance from someone you know doesn’t manage his or her own money well. People often are embarrassed to admit they need financial help, don’t allow yourself to be trapped by your pride. Seek out a financial professional.

INVEST

Once you have a good handle on the other three areas, you can begin to look at investing. It should be considered a long-term strategy. Be wary of the “get-rich-quick” types of investments. Think about the children’s story of the tortoise and the hare.

Before you begin any investment, I recommend not only reviewing the investment, but yourself as well. What type of investment knowledge do you have? What are your personal abilities and desires, your short- and long-term goals? For example, many people believe rental properties are a great retirement- income option, and for some, they are.

What about you? How much do you know about homes, construction and repairs? Would you be able to do the repairs yourself, or would you need to hire someone? Consider the cost of taxes and insurance. The cost of rental property is much higher than the cost of the property itself. Take the time to thoroughly review all the options before you invest.

When your time comes, will they find you prepared — or will those you love suffer the consequences of your mismanagement or procrastination? Your opportunity to seek professional help is now. Don’t let it pass you by.

Written by Kathy Rogers

Kathy Rogers is the vice president of Marston Rogers Group, a life planner and financial consultant. Reach her at (228) 206-5902 or Kathy@mrg.life.

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