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Three Tips to Help You Reach Your Financial Goals

Three Tips to Help You Reach Your Financial Goals

January 23, 2020

We are about three weeks into 2020. If you are like most Americans, you may have already given up on your New Year’s resolutions. About 40 percent of Americans set a resolution and about 60 percent of them fail within six months, according to University of Scranton psychology professor, John C. Norcross.

Maybe this is a great time to reset your resolutions and improve your financial situation at the same time. Here are a few great ideas to improve your financial life in 2020.

Create an emergency fund. Most of us know that it’s a good idea to have a cash reserve to cover about six months of expenses. But, most of us don’t have one. Start one now. Look at your monthly bills, identify the bills that you must pay each month and total them up. Take that amount times six and set that goal as your emergency fund. Maybe it’s $5,000 a month. Then your target is $30,000 for an emergency. Keep $15,000 or $20,000 in savings at the bank. Remember, it’s insurance against an emergency, it’s not an investment. Keep it at the bank because the bank is safe and it’s pretty easy to access in an emergency.

I suggest the balance of your fund, in this case $10,000 or $20,000 can be in a Home Equity Line of Credit. This is cheap and easy to get and costs nothing unless you use it. It’s also pretty easy to get at and even when you use it, the rates are quite attractive compared to credit cards.

Get debt free. This may sound pretty aggressive, but it’s a huge advantage as you near retirement. Remember, a fundamental calculation you make as your evaluate retirement is: “What will I need to spend every month?” The fewer debts you have, the less you will need each month in retirement. Theaverage American over age 50 has about $36,000 in debt, not including a home mortgage in 2018 according to a Northwestern Mutual Life Insurance study.

A study done by Experian in 2019 showed the average mortgage balance at $203,296. If you have a few debts to retire, consider the Debt Snowball Method to speed up the process and keep yourself motivated. It may feel aggressive at first, but it’s a huge accomplishment when you get it done. Start small and keep moving, you will be amazed at the progress your make.

Create a holistic financial plan. A clear, step-by-step game plan is a huge comfort as you face a major financial challenge like retirement. As you look at various surveys of Americans’ financial fears, you will see different specific answers at the top of the list, but they all share a common theme: being prepared for unexpected challenges. Maybe it’s having to quit working early, having a health crisis, or helping a child financially.

A holistic financial plan will give you an organized way to think about your financial priorities and a detailed assessment of your current situation along with projections for the future. A great way to get started on a financial plan is to meet with a couple CERTIFIED FINANCIAL PLANNER™ professionals.

CFP® designees have industry experience, extensive training and a stated commitment to the financial planning profession. You can count on them for well-rounded advice on all aspects of your financial life.

To find a CFP® professional near you, start your search here.

As you visit with financial planners, I suggest a couple things to check:

  • Is the advisor always the client’s advocate – a fiduciary advisor?
  • Is the advisor only paid by clients, not any financial product manufacturer or distribution network? That would be a fee-only advisor.

These two points help assure that you are working with a professional who is committed to your best interest at all times. It seems sort of obvious to me that a professional would work in this way, but it’s not automatic.

A fiduciary, fee-only CFP® professional can help you make great retirement income choices and develop a comprehensive financial plan that is driven by your goals and priorities and addresses all aspects of your financial life. With a big-picture approach, you will be better prepared to understand your options at every step along the way.

Yes, I am a CFP® professional. I’m always a fiduciary and I only work on a fee basis. And yes, I’m still taking on a few great families to be part of my financial planning practice.

If this article has you thinking about your own circumstances, contact my office at I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.