person looking over financial reports

You may or may not care for New Year’s resolutions, but regardless of how you feel about those annual plans to quit smoking or start exercising, there’s one thing you should take the time to plan for the coming year: your finances. Especially as you age, the state of your finances becomes increasingly important to your state of life. As the year begins, now is the optimal time to plan and prepare for 2016 and the years to come.

Step 1: Evaluate your assets

Before you decide your financial goals, you should first evaluate your current finances. Start by documenting your current financial state with a snapshot of your assets and resources. Take a look at your investments, and calculate your current net worth. The closer you are to retirement, the more important it is to verify that your finances are on track. You may want to meet with a financial advisor at your bank or investment firm and determine what changes you can make in the coming year to increase your returns and better prepare you for your future retirement plans.

Step 2: Set goals and priorities

Goals are the basis for any plan. Take a look at your finances and decide where you want to be by January 2017. Sit down at your computer or with a pen and notebook and brainstorm where you see yourself in a five years, three years, 6 months, etc. Once you have this outline of what you’d like to achieve, you can then order your priorities. Organize your goals into a numbered list of priorities starting with the most important. This list will then serve as the foundation for your more specific goals and action plan.

Step 3: Create an action checklist and timeline

Once you’ve determined realistic goals, write out the actions you’ll need to take throughout the year to make those goals achievable. If you need to increase your retirement savings, what will you need to do to make it possible? If you’re already retired but want to set aside money for a big trip, what expenses will you need to cut to have the funds? As you evaluate the real actions you’ll need to take, you may have to reassess your goals. If a big trip in 2017 would require too many budget cuts, you may need to plan it for 2018. Don’t be afraid to make necessary changes so that your goals are attainable.

Step 4: Identify potential threats

After you’ve determined what you’ll need to do differently in 2016, take a look at what could keep you from doing it. Problems with overspending or potential healthcare costs may interfere with big vacation plans or your cost of living. As you look at these threats, you should plan accordingly. Maybe you’ll set aside money for an emergency fund or you’ll investigate more extensive health insurance options. By recognizing what may go wrong throughout the year, you can better plan to address those problems as they come up.

Step 5: Create a realistic budget

Sticking to a budget is tough, but the more realistic you are about the cuts you can make, the easier it becomes. By taking a look at your bank statements to see how you actually spend your money, rather than how you think you spend your money, you’ll be able to set some realistic goals for cutting out or cutting down on certain expenses. Perhaps you’ll want to drop a monthly subscription or eat out less each month. Making small downgrades to your expenses can make a budget manageable while still being effective.


Financial planning can be time consuming, but it adds security to your goals and your future. By setting aside time to evaluate your goals, you will help transform your vision for the future from a vague hope to a potential reality.