Broker Check

Vista Wealth Management's 8 Financial Areas to Review Annually

1. Finalize your income tax return and project the next year for taxes

This is a foundational step in any planning.  When you file your income tax return you are summarizing the previous year.  This is the perfect time to gather all of your financial information to plan for the future.  It is to your benefit to file your tax return as soon as possible especially when you are receiving a refund.  A refund is an interest free loan that you provided to the government.  Get your money in your account as soon as possible.  If you owe money you can wait until the required payment date.  Now with the information you gathered you are ready to project the current year taxes.  This is the time to do planning.  Are you taking advantage of the tax deductions and savings available to you?  Are you scheduled to get a large refund or will you owe?  This is the time to adjust your tax withholding or estimated payments.  It is all about cash flow.  Now that you have an idea of your cash flow or after-tax money you can use this in your financial planning.   Vista Wealth Management is here to help you determine your after-tax cash flow and help you with the financial planning process.

2. Review/Create your personal budget

A Budget lets you track where your money goes and can help free up cash for savings and long-term goals. Starting a budget is relatively easy; you can use a budgeting software, or simply jot down your income and expenses on paper. Before starting, however, it’s a good idea to analyze your spending for a month to see where your income goes. Your spending can be broken down into three categories: Fixed Committed Expenses such as mortgage or rent, Other Committed Expenses such as groceries and utilities, and Discretionary Expenses like eating out. And don’t forget to budget funds for savings goals. Remember that the key to making a budget work is discipline: Making yourself record daily expenses regularly, and making sure you adhere to your self-imposed spending guidelines will ultimately pay off through better spending habits and increased savings. Vista Wealth Management can help you take a look at your budget and review area for improvement.

3. Plan your emergency fund

Having an emergency fund available can be a buffer you in times of financial distress or when sudden unforeseen expenses arrive for things like medical needs, home repairs, and the costliest of all, unemployment. Having these funds available allows you to not have to rely on credit cards or take out high interest loans that are often very difficult to pay off. Most experts suggest having up to 3 - 6 months to cover your fixed expenses tucked away. The right amount always depends on the individual or family in question, though. Always remember that it’s never too late to start saving and even a small amount of savings can be of great benefit in a time of emergency. It’s rarely fun (or easy) to save money but when the time comes, you’ll be very glad that you did. Vista Wealth Management is here to help guide you through getting a plan started.

4. Evaluate/Create you goals for 1 year, 3 year, and long term

Goals are something that all of us should to be thinking about in our work and our home lives. What are our true priorities in the near and long term and how are we doing along the road to achieving them? An important thing to remember when creating goals is to make sure that they are S.M.A.R.T., Specific, Measurable, Attainable, Relevant, and Timely. Create: 1 Year Goals, things you can act on today or this week with concrete steps that you can take; 3 Year Goals, require some planning in the near term and a focus on how your daily habits are moving you in the right direction toward them; and Long Term Goals, the goals you want to accomplish in the future and require time and planning. Vista Wealth Management is here to help you figure out what your goals are and how to move forward.

5. What is your personal net worth?

The accounting definition of net worth is: Net Worth = Assets - Liabilities. Assets are anything of value that you own that can be converted into cash. Liabilities are your debts, such as loans, mortgages, credit card debt, medical bills, and student loans. The difference between the two is your net worth. The calculation of your net worth is important because it is a snapshot of your financial situation at a single point in time. When measured against a previous calculation, it becomes either a measure of your success or a wake-up call depending on weather it has increased or decreased. While there is no “ideal” net worth that applies to everyone since we all have different situations and goals in life, it is important to know where you stand vs. YOUR ideal net worth. At Vista Wealth Management, we precisely measure your current net worth as a part of our financial planning process. When combined with other data and measured periodically, it is used to calculate a reasonable target for your financial goals. We then create and implement a personalized financial plan with periodic benchmarks toward achieving those goals.

6. Review your insurance policies

When evaluating your life insurance needs, make a list of any changes to your circumstances. Events such as new babies, and changes in lifestyle such as marriage, divorce and inheritance are all changes that may require an addition or change to your life insurance program. As important as life insurance is, you should also be reviewing your property and casualty insurance policies. Policies such as homeowners/renter’s insurance, auto, boat and other vehicle policies, and your personal liability umbrella policy. We at Vista Wealth Management incorporate the review of our client’s insurance programs during the normal course of our financial planning engagements. If you would like a professional review of your insurance program without going through our financial planning process, please contact us. We have three PA licensed insurance agents on staff and are ready to be of service.

7. Do your investments match your goals?

As we travel through the various stages of life, our goals are constantly changing and evolving. It is essential that your investments match your goals so that you are able to achieve financial stability in your latter years. When you are young, you can afford to take more risks because you have the years and time to endure the fluctuations the stock market has to offer. Additionally, during this time of your life, your goals may include saving for purchases such as a home, a car, education for your children. The next phase of your financial life will be the growth phase. In this period, you are working to grow the value of what you began in the early part of your life. The expenses from the previous phase should decrease and the income increase. Your risk tolerance in your investments may change from aggressive to more moderate so your investments should reflect this risk adjustment. The final phase is the income phase, also known as your retirement years. In this part of your life you are more concerned about preserving the wealth you have built over your lifetime. Your risk tolerance may become more conservative and your investments might move to more fixed income investments such as fixed deposits, investment grade bonds, and low risk stocks. Your investments can help ensure a steady flow of funds to augment your living expenses. The team at Vista Wealth Management can help you plan and ensure that your investments are aligned with your goals and priorities as you move through the various phases of your financial life.

8. Create/Review your financial plan

Your financial plan should take into consideration your wants, needs and goals from now through retirement. When you get right down to it, financial planning is simply determining goals, analyzing assets, liabilities, and opportunities, and coming up with a plan for how to reach these goals. Once you have a plan, you should work with your advisor to implement the strategies then semi-annually or annually, or when there is a life event, review your plan to assure you are on target and make adjustments when necessary. This will act as your GPS for working towards your goals for retirement, paying for college, or purchasing that second home. Vista Wealth Management has tools to help you revisit, revise or create a personal custom financial plan based on your family priorities.

Have Questions For Us?

Thank you!