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The launch of a new decade is a great time to assess your financial status, and just as important, to focus on your financial future with a total makeover. This is especially true today when so many of us are still reeling from the battered economy and record unemployment. But regardless of your current financial circumstances, there is always room for improvement and step one is to create a list of goals.
To help you, take a look at the key priorities that are the backbone of any financial plan.  You have to know where you are starting from in order to know where you are going.

•    Establish your net worth: Add up the value of your assets- your home, investments, retirement accounts, savings, etc. Then add up your liabilities- mortgage, credit cards, personal loans, etc. When you subtract what you owe from what you own, there is a snap shot of your net worth.

•    Do a cash flow analysis: You have to know where the money goes so analyze your previous six months of fixed expenses- rent, mortgage, utilities, food, taxes, health care, tuition, credit cards, loan payments, etc. Then add up your cash withdrawals over that same period. If the combined numbers stun you, it may be time to reassess priorities and draw up a budget to live within.

•    Look ahead: Do you have greater anticipated expenses in 2010 such as relocation, the birth of a child, weddings and celebrations, marriage and/or divorce, medical procedures, college tuition, major purchases (home, car, vacation)? How will you pay for these? If your only choice involves getting further into debt, work with a financial planner to explore options. Credit card debt especially doesn’t extend your paycheck, it depletes future earnings for years to come.

•    Review your insurance and employee benefits: Are you adequately covered in the event of a death or disability? Are you taking advantage of all the programs and plans your employee offers? Nothing is more important than protecting you and your family while at the same time, maximizing investment and retirement allocations. You don’t want to look back years from now with regrets.

•    Manage your 401k and/or other Retirement Accounts: The laws keep changing to the benefit of employees, but it’s up to the individual to oversee their accounts and to make the choices that best suit their goals. Work closely with your benefits department so they don’t assume a one-size-fits-all approach is what you want.

•     Establish your career and/or retirement goals: If this is the year that you hope to go back to school, get a new job, relocate or retire, these transitions need to be factored into your budgeting considerations.  How long can you go without a paycheck? How can you maximize your portfolio to help you with living expenses? Don’t jump in and ask questions later. Begin with a plan.

The key to all of this is honesty, objectivity, and seeking the help of a trusted financial advisor. Not only will you likely discover options you didn’t know were available to you, you will be better positioned to achieve your goals. What would be better than looking back a year from now and breathing easier?

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Tags: 2010 financial planning, 2010 financials, 2010 forecast, 401k, cash flow analysis, lee rosenberg, lee rosenberg cfp, review insurance policy

About the Author: Lee Rosenberg is the Co-founder of ARS Financial Services, Inc. As a Certified Financial Planner with more than 34 years of solid financial expertise. Lee is a registered representative of Cadaret, Grant & Co., Inc. He was also named one of the top 25 Independent Financial Advisers in the US by Rep magazine.

This entry was posted on Thursday, January 7th, 2010 at 11:12 am and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.