Five Financial Moves To Make On Your Birthday

Once a year, on your birthday, tackle a new step toward your financial future. It's a date that you won't forget. Setting it as a target date to get your finances in order is probably the best birthday present you could give yourself. Here are a few personal financial tips to consider.

Investment Portfolio

Beginning with your investments, check through your portfolio. When did you last make any changes? Even if you made changes to your investments a few months ago, the stocks and bonds you bought may have gotten weaker since then. Make a note to discuss them with your financial advisor. Keep up with your investments in the financial pages of your newspaper or online so you have a good idea of how they’re performing - rising or falling.

You want to buy and sell stocks so your retirement security is strong. Sell under-performing stocks and replace them with higher-performing stocks. You may even consider having your investments actively managed by your financial advisor so you won’t have to.

Also, it’s a great idea to have your investment portfolio reviewed by an experienced financial advisor to make sure you’re getting the best performance possible.

Increase Your 401K Contribution

Discuss your 401K fund with your Human Resources office. If you’re able, fill out paperwork so you can increase your contributions to your retirement savings plan.

Start an Emergency Saving Fund

Emergencies happen. Consider opening an emergency savings account – this helps you to ensure that you won’t be caught short of funds.

If, for instance, you lose your job, are seriously hurt or become seriously ill, you’ll need a reliable source of income. You can use it to replace your paycheck while you’re looking for a new job or recovering from your illness/injuries. Stay away from creating unwanted debt. Don’t take out loans you can’t repay. Don't max out your credit card, especially if you’re not sure how you’ll make the monthly payments. Set aside a minimum of six months’ income in that emergency savings account – one year’s income is better.

Buy a Whole-Life Insurance Policy

No matter your age, you need life insurance. If you unexpectedly become disabled or you die, the funds in that policy will help your family stay afloat.

Choose a whole-life policy that grows in value. A term insurance policy is a good starter policy, but it won’t grow in cash value. A whole-life policy does grow.

Have Money Put into Your Retirement Savings Automatically

Today’s banks are able to deposit money from your paychecks and place them into your retirement savings account. (If you don’t see the money, you won’t miss it. Better yet, with every deposit, your savings grow.)

Begin slowly by having 1 or 2 percent of each paycheck deposited into your retirement account. Every year – on your birthday – increase this deposit percentage so you’re consistently increasing your retirement contributions.

Conclusion

A few personal financial tips that you can take away--every birthday, you should review your retirement account, account contributions and balances. Ask your Human Resources department if you can do anything else to add to your future retirement. (Are you eligible for a Roth IRA?)

Take advantage of opportunities you haven’t had before. Go over your life insurance, investments, wills and trusts. Complete a financial review with an experienced financial advisor along with an accountant or CPA. Make sure to ask them about any potential tax liability that you may incur. Don’t forget to ask them for any strategies you can use to reduce that liability.