What to Do With Your Money in 2019 According to Financial Advisors

Posted on December 11, 2018 by resourcefulman

Monetary mistakes are a dime a dozen. Only, you know, they end up costing us a little more.

To prevent these costly financial mistakes, we asked some financial advisors and professionals that clients are prone to make mistakes and you should do it differently in 2019.

Think more critically about your decisions

Don’t make New Years Resolutions. They do not work.

Set goals now or early January (after the holidays). Goals must be realistic. This is the key. If they are too difficult or unattainable, most people give up before they even start. When setting goals, start small and work your way up. For example, if you contribute three percent to your 401 (k) plan, increase it to four percent. Then plan in six to nine months to increase it to five percent.

Likewise, if your cash reserve is only one month’s living expenses, give yourself time, say six months, to [get] to two months living expenses.

Small steps that are actually implemented are much more likely to remain implemented. Then you can go from there and again, slightly raising the target.

Another thing people need to do is test their goals. This does not mean that you need to monitor every move in the stock market. This means you need to monitor your progress. This should be quarterly.

– Thomas Scanlon, CFP, Raymond James

Hi Tom, this sounds familiar !

Pay yourself first

Noisy markets sometimes cause people to stop contributing to their retirement plans when we should be doing the opposite and keep putting off our 401 (k) retirement plans or others. If you are concerned about instability, you should still do your part, especially if you are still many years away from retirement. Markets have historically experienced downturns and have subsequently recovered.

– Kathleen Grace, CFP, United Capital

Study Your Tax Account Carefully

As you prepare to file your tax return, we recommend that you carefully review the detailed and standard deductions. People who usually list details may end up getting a standard deduction this year due to the Tax and Jobs Cut Act, which nearly doubled the standard amount, which has grown from $ 6,350 to $ 12,000 for a single submitter … prefer to use standard deduction for simplicity. For those who have historically required an itemized deduction, we recommend looking at how the recently increased standard deduction might affect their reimbursement.

– Christina Taylor, Senior Tax Operations Manager, Credit Karma Tax

Switch to an online savings account already

Most people still use their basic savings accounts at a regular bank. They still mostly pay only tiny interest. Many online savings banks pay 1.9 percent or more with FDIC insurance. Why not earn more interest on these savings?

– Karen Lee, CFP, Karen Lee & Associates

Remember, this time on the market, Graphs

Market timing versus market timing. Statistics show that the most active managers are lagging behind, and attempts to time the markets pose a greater risk to individual investors. While staying invested is not always convenient as long as the global economy continues to improve and grow, investors must be rewarded with time and increased investment.

– Shannon Lynch, CFP and Senior Financial Advisor at Personal Capital

Remember that time is your most important investment asset . Same way,

Check how your portfolio is allocated and make sure its riskiness matches your level of risk tolerance. Having a portfolio that is more risky than you are truly comfortable with could help boost your profitability while things are going up, but it can be problematic if the markets reverse, especially if it forces you to react sharply and sell in the midst of a downturn. Sound investment strategies require investments to remain in place for full investment cycles – getting cash in a market crash lowers your temporary paper losses and turns them into realized capital losses and often means you won’t be involved in the ultimate market recovery. Having a sound investment strategy only really works as intended if you stick with it and don’t chase profit in rising markets or panic selling in falling markets.

– Michael Ciccone, CFP, Tradition Advisers

Be on the lookout for merit.

In 2019, be more proactive in protecting your loan. Check your credit card accounts online daily to make sure every transaction is legal. Online credit card scams are on the rise and you can save yourself a huge headache if you catch a fraudulent purchase before too much damage is done.

And don’t forget to check your free annual credit reports as well. This way you can catch a fraudster who opened a new account in your name. There are three main credit bureaus and every 12 months you are eligible to receive a free report from each bureau. It is helpful to get your credit report from one of the bureaus once every four months. This way you will get an idea of your credit report throughout the year.

– Beverly Harzog, consumer finance analyst at US News & World Report.

Here’s how to check your credit reports and how to protect yourself from fraudsters . One step you should definitely take: freeze your credit accounts . Just be sure to check your financial accounts, which are also not on your credit report.

Reduce investment costs

Most people don’t realize the significant impact high spending ratios can have on their investment. An annual commission of one to two percent in a mutual fund may not sound like a lot, but when applied to growing balance sheets for decades, it can easily result in them getting several hundred thousand dollars less than they would otherwise. Not only are direct commissions lost, but also the opportunity costs of growth that would otherwise have occurred in relation to the amounts paid in commissions. There is a simple calculator at this link that demonstrates the impact. There are many low-cost index funds available these days, and a wealth of academic research supports their use for individual investors.

– Stephen Fox, CFP and Founder of Next Gen Financial Planning

Make the hard choice

It is likely that even though Social Security is there, it may not pay out as much as you think … In today’s world, we are all responsible for ourselves. It used to be that unions looked after workers and made financial decisions on behalf of the worker, and that managers and other middle and senior executives received pensions.

We don’t have that anymore. Every man for himself. We have to make difficult choices: live in the present or save and invest in the future. Social security won’t save us. The government will not save us. We need to make sure we educate ourselves (and others) to do our best to live within our means to have a decent life in retirement. The current working generation will likely lack the means to maintain the same standard of living as our parents.

– Monica Dwyer, CFP, Harvest Financial Advisors

Check your retentions

The end of the year is also a good time to reconsider withholding your paycheck – the amount of federal income tax your employer withholds from your paycheck. If this is too much, you can get a refund; too little, you may be subject to taxes. The Tax Cuts and Jobs Act will affect payroll retention for most Americans, and those affected will have a significant impact on tax returns. Most Americans will notice that their withholdings have decreased, which means that they probably received a little more cash in their salaries. In this case, they are likely to receive less refund than they are used to. Please be aware that any changes made to your withholdings at the end of 2018 will not take effect until the 2019 filing season and will not affect the 2018 tax year.

– Christina Taylor, Senior Tax Operations Manager, Credit Karma Tax

Take advantage of credit card rewards

Many consumers do not use their credit card bonus programs. The new year is coming, so make a decision to read the details of the bonus program for each of your bonus cards. If it still seems unclear, call your issuer. Master the details and track awards by creating your own Excel spreadsheet or using the free app. Once you start using your bonus credit cards strategically, you can profit from your credit cards.

– Beverly Harzog, consumer finance analyst at US News & World Report.

The more specific the better

Have a specific financial plan – a specific keyword. Many people make the mistake of setting goals that are too vague, such as “pay off debt” or “save more money.” Instead, set clear and measurable financial goals. For example, commit to investing $ 200 in the highest-interest monthly credit cards and $ 20 per week in a contingency fund. This makes it easier to track progress, keeps you motivated, and adjusts your plan as needed.

– Betty Hardeman, Personal Finance Expert at Tally.

Make your savings a priority

Save 15 percent of your income on super profits. Do this automatically so you never see it on your checking account. This is how your investment order should be:

1) Build your emergency fund

2) 401 (k) contribution to match your company

3) Contribution to HSA if you are eligible

4) Roth Ira

5) Investment account after tax or 401 (k) maximum. If your 401 (k) has a Roth option, and you’re in a low tax group, or making less than $ 200k (one-off) or $ 400k (co-op), use the Roth option. Especially if you are under 55 years old.

– David J. Haas, CFP, Cereus Financial Advisors

Learn more about IRA Roth 401 (k) and Roth .

Check your beneficiaries

Check your beneficiaries annually on all life insurance and IRAs or 401 (k) s. I regularly see people with ex-spouses or deceased parents as beneficiaries. NEVER leave a recipient with an IRA at The Estate. This makes it impossible for your heirs to “stretch” these tax-free income for life!