SHOW NOTES
In this episode, I look at why it’s important to do an end-of-year financial review, what to include when assessing your financial position, and how you can meet your 2023 goals.
As 2022 is coming to a close it can be valuable to take stock of what you’ve achieved this year, in your personal life, professional life, and financial life.
For many people, 2022 has been a hard year but by carrying out an end-of-year review and setting yourself goals for 2023 you can achieve whatever you put your mind to.
In this episode, I look at what to include in your financial year-end review, the importance of yearly portfolio reviews, and how you can make hitting your saving goals easier…
“It’s time to look forward to the future and New Year, have you made a plan?” – Ben Jones
Time Stamps:
01:07 – How I did financially in 2022.
02:00 – How a bike accident affected my physical health.
04:10 – What to include in your financial year-end review.
05:20 – How insurance levels are changing.
05:43 – The importance of yearly portfolio reviews.
06:33 – Tax planning and benefits.
07:16 – How charity donations can benefit your tax situation.
07:55 – How inflation is affecting people’s financial goals.
09:10 – How selling off investments can help offset your taxes.
10:30 – How to make saving easier.
Resources:
Connect with Ben Jones:
TRANSCRIPT
Welcome back to Money with Mak & G, the holidays are here and the year is coming to a close. I don’t know about you, but it’s a time that always gets me thinking. From a financial perspective, I hope you’ve been thinking of the various items you can set in motion or fix that will get you on track for 2023.
In several of the businesses I’m involved with, there is a lot of company talk and personal talk, when it comes to Money. First, companies are asking how the year is going to finish. What is the total for the year 2022 financial results? For many businesses, this also means taxes. Personally, it’s time to think about taxes as well. And, as we review the company’s health, we think about 2023. We do the same thing personally, or should, think about how the current year will end, and our financial and physical health, and put that information and expectations for 2023 in motion to set ourselves up for success.
As I look back on 2022, some businesses did well, others not as much. For me, financially, I got hammered. The market took a crazy downturn and trying to time the market rarely proves positive. So, you ride it out. I’m talking a good 33% down. If you believe in the market like I have to, I’ve been holding on, but it’s still painful. You got hit in the face, you’re bruised, and it takes time for those bruises to heal. No time to act rash.
2022 personally was a roller coaster. I wanted to be healthier, in a better financial position, and in a job that made me feel fulfilled. But, that’s not exactly what 2022 gave me, though I had lots of new experiences. I also had a scare or two and now I’m on a new path. However, it was spiritual and the universe delivered something a little different.
Hey, I had a Biblical wreck on my bike. First time using my GoPro on my bike, and I hit a soft patch, went right over the handlebars. My clavicle was broken in several spots, which undulated, like a wave when I moved my arm to stand up. I couldn’t recall any injury for 30 years. So, surgery, 12 screws, 3 months of recovery or so, and that “healthier” thing went sideways. I missed my first triathlon. Then the pickleball accident, twist of a foot, a shoe flying in the air 10 feet, and then broken. I was playing with my wife, against others who were at least 15 years wiser than me. What the heck?
So, health went the wrong way….twice. The portfolio was down huge, plus the cost of all the doctor’s bills was another punch in the gut. Hey, I did get to do some really cool stuff this year at work and made some huge strides. And 2023 brings some big challenges there, which should make next year pretty awesome, as I like those.
But, after getting back in shape, doing a bit of yoga, biking, and some other strength classes at my local gym, I had some numbers in one of my health tests that were causing concern. They weren’t sure if I had cancer. So, after some very humiliating tests, and since this is a family show, I’ll keep it clean, it came back benign. That means no cancer, but I need to watch it going forward. YEAH, fun. This podcast is named, I put the “Ben” in benign. So, all good.
This isn’t about poor Ben. We all have struggles, and everyone’s are different. I got to travel the world, hang with my kids, start a couple of new hobbies (not breaking bones) and I had a ton of fun with a number of projects like Money with Mak & G, though some were slowed down due to injury. And, yes I was a wild man this year, which, based on my age should tell me to put the brakes on some things. I will slow down a thing or two. But, the key is that I’m realizing I’ve got around 20 years left, based on life expectancy. You can call the cancer thing a scare, but it was a reminder to not put things off. Nothing is certain, and when it comes to money, putting off your decisions or actions to get your crap figured out and move forward should NOT wait. If not for you, for the ones you love.
Ok, do you have a year-end checklist of the things that are non-negotiable to deal with at the end of EACH year? If you don’t, then let me help. I know some of these sounds like a pain, but they can be BEYOND important to help you and your family long-term with your financial health. This isn’t the full list, but there are some important ones that might spark other questions:
- Insurance Review
- Portfolio Rebalancing
- Update Your Beneficiary Designations
- Review Your Emergency fund
- Your Kids College Fund
- Make a Charitable Donation
- Spend Your FSA
- Evaluate Your Retirement Savings
Have you looked at your insurance levels lately? How about life, home, and auto? Inflation is driving prices higher. If something happens to your house or car, do you have enough coverage? If something happens to you and you’re the main money maker, you owe it to your family to take another look
I mentioned the market got hammered this year. Are you out of balance in your portfolio? Do you have way too much technology or too little? Do you need to be a bit less or more conservative? Is this the year when you know it’s time to talk to someone to help make some changes? Those little adjustments to the investments you hold can really make a huge difference. Just look at the research.
By the way, are your beneficiary designations up to date? These are the people or organizations that get your money if you pass away. Do you have the right people on those beneficiary forms? Things change! They do for me, and I bet they do for you too. When I was much younger someone told me to check them, and I remember having a friend on one who wasn’t even a part of my world anymore. So, check ‘em.
It’s a great time to look at your Emergency fund and make sure you’ve got it funded right, and make adjustments.
I always try to do tax planning in September, but sometimes it takes you down to the wire. Did you fund your kids’ college fund? Indiana offers a tax credit of 20% up to $5,000 contributed. That’s $1,000 off your taxes immediately. FREE money. My favorite 4 letter F-word. FREE. Take advantage of it.
If you’re charitably minded and want to make a financial donation, and if it works for your tax situation, make sure to get it done before year end. If you need to make a big donation, and not sure who to give it to, I love the donor-advised fund. A great way to manage those big contributions, find a quick video on the EduCounting YouTube channel. Two minutes, and you understand how it works.
For those on your game with your health benefits and you put money into your flexible spending account, time to make sure you spend it ALL. We’ve got a great blog on it, but there are MANY ways to use it, so don’t lose it. There are normally some extensions into the following year, but WHY wait? Focus, execute, and spend it.
If you haven’t heard, Inflation is hurting a lot of people and 50% of people say they are saving less. Plus the market is making some things tough on many of our accounts. A ⅓ of people are uncomfortable with their emergency savings. About ⅓ of Gen Z-ers are behind their retirement goals, with ½ of millennials, and almost ¾ of baby boomers. So, take a look at that retirement account. Did you get a raise? If so, can you adjust your contribution to your 401(k)? Can you make a contribution to your IRA for the tax deduction? Or better yet, with the market down huge, can you do a ROTH conversion? That means taking some of your regular IRA savings and paying taxes to move it to a ROTH account. Then, no more taxes on it ever. It has to be done by end of the year, so you have to hustle. Timing is everything and retirement planning is huge.
Hey with the big losses in the market, you might be able to sell off some of your investments to offset some of your taxes. You may need help, but if it’s right for you, make it happen. So, I had to transfer money, fund accounts, update contributions and work the tax angle every year at this time. I’m glad when it’s done, and you will be too.
After you got that conquered, or while you’re doing it, it’s time to look toward the future and the new year. Are you focused on your plan? Have you thought of your
- Estate
- Vacation
- Changes to family
- Career Changes
- Big expenses in 2023
- Key financial goals
- What about Non-Financial items
When you start thinking about next year, it helps to have a plan. Yes, that means a budget. Which can be a lot of fun, if you’re working toward something you want like a trip to Paris or reducing the stress of credit card debt, funding your emergency fund or investing more in Tesla. If you’re up for a laugh, I did a song about credit card debt on the EduCounting YouTube channel singing a song from Hamilton. It was fun, try not to laugh too hard. Anyway, a lot of dealing with money is planning and discipline. Plan your work and then work your plan. Sometimes discipline is tough, but there are ways to help. If you’re saving, set up a separate bank account, and auto-feed it weekly. That’s simple, right? Out of sight, out of mind.
Is this the year for the Aspen ski vacation? Is it time to plan for the transfers of your estate? Big word, but an estate is simply all the stuff you own. Who does it go to? Is 2023 for you to put together your will? Is your wife expecting another bundle of joy? Or are you helping out Agnes with long-term care? Are you taking a new job? Has your pay or benefits changed? They’re all part of your budget and money situation. Gonna buy a new car or other big expenditures, like braces for the twins. OUCH. You might want to put on the new porch. Or is there a financial goal to pay off credit card debt?
This is a fantastic time to get your house in order. Don’t wait. Since we can’t always be about money, what non-money goals do you have? More memories with the family? New hobby? Visit those friends in Dallas you haven’t seen in years. Maybe lose a little unwanted weight? Is there such a thing as “wanted” weight? Hey, my friend pushed me to sign up for a ½ marathon in Vegas in February. I’ve always wanted to run the Vegas strip. Time to check that box off the bucket list.
It’s been a great year in many ways, and a tough one in many ways as well. That’s living, right? Put in the time to do a little work and get your financial and non-financial house in order. None of us are getting any younger. Until next time. Thanks for being here and we’ll see you soon for more Money with Mak & G.
