We have again reached the point of turning the calendar over and are embarking on a new year on our calendar.  It’s now a good time to turn over our finances and find ways to improve how our finances are working for us.  But what are some things we can look at now to begin to make an impact now, and moving forward?

  • Understand Your Cash Flow and Understand Why It Matters – By understanding what funds of money are coming in the door and going out the door we will become more comfortable with our financial situation.  For the most part, people usually understand how much money they are bringing in each month but what they are spending monthly is not usually known, or unfortunately is ignored. As I work with clients I see that often people do not truly realize what they are spending money on.  When asked to give a number off the top of their head how much money they spend per month people will usually give a number that is well below the actual amount.  When people dive into their spending and realize how much they are spending there is usually noticeable anxiety and a sense that there is nothing that can be done.When sitting down with clients and examining a credit card or bank statement I ask what they spent this money on.  Often people are spending money on things that do not matter or that they care about.  Small tweaks to spending can free up cash flow to use for more important needs.  Caution, do not try to radically change your spending patterns all at one time.  Much like a diet you need a “cheat day” until
  • Review Investment Expenses – This advice is often found in financial blogs and articles and it is great advice.  Making sure that you are reducing investment expenses is a great way to increase your performance in your investment accounts.  A great place to start is the expense ratio.  A mutual fund’s expense ratio includes three basic types of expenses:
    • Management fees: Paid to the fund’s managers who decide how to invest your money. You may also hear this referred to as an “advisory fee”.
    • Administrative fees: Covers such expenses as office rentals, administrative staff (such as secretaries), and other expenses not covered by the management fees.
    • Advertising fees: The costs associated with marketing the fund to prospective investors, also known as 12b-1 fees.  

Many funds offer fee waivers and reimbursements to attract investors. In other words, funds can offer a temporary discount to the advertised fees. The net expense ratio is reflective of discounts like these.  In other words, the net expense ratio represents what investors paid during the most recent fiscal year.  This is one of the investment expenses that you will be looking to reduce.  

If you are comparing two mutual funds or two ETF’s and one has a much lower expense ratio but has similar performance, then it might be worthwhile to consider changing funds.

  • Protect your Identity – Not only is this good advice for your finances but it is good advice in general.  Now more than ever it is easier for criminals to steal your identity, credit card information, taxes, etc.  Nothing is safe.  Consider these tips to help keep your personal information safe and secure and protect you from identity theft
      • Don’t carry your Social Security Card in your wallet
      • Make a list of your credit card and bank account numbers – Keep in a Safe Place
      • Create Strong Passwords – One of the best ways to do this is to use a variety of letters, numbers, and symbols.   
      • Use a Password Creation App – passwordsgenerator.net is a tool I like to use.
      • Update your Passwords often – It is recommended that Passwords are refreshed at least every 6 months
      • Look over your bills and credit card statements for accuracy – This should be done regularly
      • Log off your computer when you walk away from it
      • Don’t Save Passwords on your PC and Mobile Devices
      • Be aware of what You Share and who you share it with
      • Keep Sensitive Personal and Financial Documents Secure.
  • Protect Your Mobile Device
  • Check Your Credit Report yearly.

If you suspect that you have been a victim of identity theft, please do the following.

    • Contact the Federal Trade Commission (FTC) to report the fraud.
      • Online: www.consumer.ftc.gov/features/feature-0014-identity-theft
      • By phone: (877) ID THEFT
      • By mail:

Consumer Response Center, FTC

600 Pennsylvania Avenue NW

Washington, D.C. 20580

  • Contact your local post office if you suspect there has been a fraudulent change of your address.
  • Contact the Social Security Administration if you suspect that your social security number has been improperly used
    • (800) 269-0271
  • Contact the Internal Revenue Service (IRS) if you think your identity has been used in a manner related to taxes
    • (800) 829-0433
  • Notify the Fraud units of each credit bureau:
    • Equifax: (800) 525-6285
    • Experian: (888) 397-3742
    • Trans Union: (800) 680-7289
  • Contact your financial institutions P
    • Put a hold on all accounts that have been or could be wrongfully accessed by the identity thief.
  • Contact your local police department
    • File a police report  
  • Create your 2017 Financial Calendar – This should have likely been done before the end of 2016 but better a little late than never.  Knowing what dates during the year that are important is key to not being caught off guard.  Some important dates below.
    • January 16: 4th Quarter Estimated Income Tax Payments Due (if needed)
    • April 18:  Income Taxes Filing Deadline.  It is also the deadline to file an extension.  This is also the date that 1st Quarter 2017 Estimated Income Tax Payments are Due
    • April 18:  Deadline to make 2016 IRA Contribution
    • June 15:  2nd Quarter Estimated Income Tax Payments Due (if needed)
    • September 15:  3rd Quarter Estimated Income Tax Payments Due (if needed)
    • December 31:  Date that 401k’s must be established

Other tasks and dates to plan are as follows

  • Review of Insurance Policies – Recommended that this is done every year or two years
  • Review Estate Planning Documents – Recommended that this is done every year or two years
  • Investment Portfolio Review – Recommended that this should be done yearly at a minimum.
  • Cash Flow Review – Quarterly at a minimum
  • Discuss Finances with Your Partner – Making sure people that share their finances are on the same page when it comes to financial decisions is one of the more challenging aspects of planning that financial advisors do, but the importance is often more important than a great investment portfolio.  Being collaborative in focusing on common goals is often the best approach to take.  Do not place blame and work together in finding common ground is the best way to approach this topic.

Of course, these are not the only things that you can do in 2017 to improve your finances, but by having a plan as well as using some of the hints in this article, 2017 will be a great financial year for you and your family.  

Olympia Ridge, LLC does not provide tax, legal or accounting advice in this medium. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.