By Christopher Cervantes, RFP

WHETHER you celebrate New Year’s Eve from some exciting and safer foreign country or at home with your loved ones, you have a New Year’s tradition or two. Aside from jumping as high as you can, or wearing polka dots for luck while enjoying a meal surrounded by 12 or seven-round fruits, depending on how you believe it. New Year’s superstition and folklore have come from different beliefs and spanned decades with diverse cultures. So, why stop people from believing it? After almost two years in a pandemic, we could use a little extra luck.

No matter what you believe to be auspicious to do on New Year’s Eve, I suppose how you spend your first day of the year will set the tone for how your year will be created. Our family tradition is to go to a quiet park on the first day of the year. This is not to enjoy family bonding, though it’s part of it; more than that, it is to plan how our year will go.

We usually use the first day of the year to identify our goals and establish a strategic plan for starting our New Year right and fast. Of course, it’s nice to look forward to what will happen for the year, but to fully appreciate that, we also take time to look back on what results we created from the previous year.

Creating a New Year’s resolution without knowing how your previous year ended will make your goal less inspiring. You should know first if you have met or exceeded the results you thought you could accomplish. Or maybe you have fallen below your expectations.

The year 2021 is for sure better than 2020. But still, it has been a chaotic year for many people, and we know a lot of our friends and family struggled and were well below where they would like to be. However, we are also aware that many good stories were created from the previous year.

If you are looking for New Year’s tradition that can be integrated with your family culture, here are some things that you may want to adopt that have been working for many years with us.

To start the year right, know what your financial position is. You can do that by calculating your net worth. Then create your assets and liabilities inventory to determine what you’re worth financially. It is also a good idea for you to create your annual income statement report. It will be a thrilling realization of how much money you earn for 2021 and where it went.

Review your financial goals, how much you have on that account already and how much more to go. It includes your plan for retirement, the college education of your children and even funds for your planned travels. Then, before putting more money in any investment account, try to rebalance your portfolio first based on your investment plan.

It is also a good chance for you to update your last will or create one if you haven’t written one yet. After seeing many people leave without a “will,” you probably have an idea about how messy it is to leave your succession plan to chance.

I also suggest that you set an appointment with your financial planner or financial advisor every first week of the first month of the year. The intention is to review all your current insurance coverages from life, disability, critical illness, accident, and even property insurances. It is also good to check and update your beneficiaries and their corresponding designation, whether revocable or irrevocable.

Once you have completed your annual financial assessment, you are all set to plan how your money will be earned, spent, grown or distributed. Know how much money you will ideally make with your current source of income and know how much money you can put aside each month. We indeed need to live within our means, but if you want to accomplish something for this year that will require a much bigger budget, the next logical question is how you can increase your means.

It is no secret that we wish for a better year for our money this 2022. But, for that to happen, knowing what your 2022 is all about is a great starting point to improving your finances, and the next step is to take action.