BY JOHN UYEKI
Now that personal income taxes are prepared and filed, step back and take a deep breath, and then start the important process of evaluating your financial health to effectively plan for the rest of 2014 and into the next tax season.
Now, more than ever before, there are a variety of planning options available to individuals based on their level of knowledge, expertise and desire for active or passive involvement.
One of the major topics of change this year in the investment world and financial media is the continuing emergence of what are called “robo financial advisers.” These Internet-based companies provide financial services through software packages that range from managing investment portfolios to offering investment committee advice.
On the surface, such a high-tech approach can be attractive to individuals who would rather receive information, even about investment transactions, using a software program than from a live human being.
One such audience is the millennials ”” people born between the early 1980s and early 2000s ”” who have grown up in a high-tech environment.
But even this audience can benefit from good investment and financial planning firms that offer a combination of traditional, hands-on attention and advice, along with the high-tech access of a robo-adviser.
These firms provide online platforms for access to account information, and investment, savings and debt calculations, as well as seasoned investment professionals, those who live and work in your community, to better understand a client”™s goals and develop customized financial planning strategies to achieve them.
Yet as some things may change, they also remain the same. Putting together a formal financial plan for the rest of 2014, even among the tech savvy, still requires clear thinking, research and analysis on the part of the individual.
To do so, a logical planning guide should focus on answering these five important questions:
What are your goals?
Where do you want to be financially by the end of the year? Debt free?
Increased emergency savings? The start of a college savings effort? A focus on retirement savings? Complete a needs assessment based on your current financial life. Create a strategy based on your goals.
How is your investment performance?
Are you satisfied with the return on your stocks, bonds and mutual funds? Should you consider selling off underperformers and allocate more funds based on your level of risk tolerance and desired return? Analyze where you are and set goals.
Will your personal situation change?
Do you anticipate any upcoming major changes in your life that will require additional planning? For example, will your marital situation, home residence, employment status or family size change in the coming months? Have you considered how you will financially accommodate them? Keep monitoring and make adjustments if your situation changes.
What is your debt load?
Are you paying too much or not enough on credit cards? Can you get a lower mortgage rate? Do you need to improve your credit score?
Can you reduce next year”™s income taxes?
Have you identified all the allowable deductions that you are eligible for and can take advantage of? Can you bunch any deductions into any one year, possibly by prepaying expenses like medical bills?
By answering these five questions as guides, you can now bring your financial future into the present so that next spring you can enjoy a healthier financial checkup after your 2014 taxes are filed.
John Uyeki is senior vice president and regional sales manager for First Niagara Investment Services for Southern New England. The website is Firstniagara.com.
