Your Personal Financial New Year’s Resolution

Find the mistakes you are making with your personal finances, writes Peter Watson.

I have a suggestion for your new year’s resolution. But first a story.

When my children were young, before they took an examination at school, I would ask them an important question: What are the chances you will get a perfect score?

My suggestion was at the end of the exam, if there was time, go back and find any possible mistakes they had made and then correct those mistakes.

The reality of being human is that we are prone to making mistakes. That’s not a criticism, but just the way things are.

My suggestion to readers is to examine your financial affairs including your financial plan, investment strategy and specific investments you own and then find any mistakes you are making.

First, assume there are mistakes. Errors could include not having a well-thought-out documented financial plan or perhaps specifics of your plan if you have one.

Are your investments held in the correct account considering your income tax situation. Often this is a mistake and people pay extra taxes. Correct that mistake and start saving taxes.

Are your fees to high? Are you getting good value from your financial planner?

An example of a mistake could be about the number one financial question on most people’s mind. Will you have enough money to last during retirement? You should not wait until you are well into retirement to ask this question. Ask it now.

If you do not have a clear path to financial independence, you might consider that a mistake. This could be your new year’s resolution to work on retirement planning.

Everyone’s personal situation and financial assets are unique to them. Finding your mistake is very specific to you.

Finding a mistake and correcting it could turn your new year’s resolution into a financial benefit.

Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through www.watsoninvestments.com