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Anne-Lyse Wealth: This is The Dreamers Podcast, episode 130. Today is December 19, 2023. consider whether you have enough life insurance, good rule of thumb is anywhere between 10 to 15 times your income is what you should have in your life insurance.
I don't know, maybe in the, Past five years, your income has significantly increased, but you never adjusted your life insurance. So think about whether you should get a second policy. But anyways, now is a great time to really take the time to look at what your plan looks like today, whether you have one or not.
And start taking the steps so that you can have a solid estate plan. And it's always something that's great to revisit at least once a year. Hello. Welcome to the dreamers podcast. I'm your host Annelies Wealth. I'm here today. I'm a little under the weather, but I'm here. I'm excited to talk about how we can end the year on a strong note.
So I'll share with you five things that you can do at the end of this year to make sure that you start 2024, on a solid financial footing. Alright, so let's get started.
So number one, stick to your budget during the holidays. when the holidays come, it's a time where people tend to overspend, right? Like last year in the U. S., one out of three people Took a debt on average of 1500 to be able to face their expenses for the holidays.
And that goes from presents to decorations. it's the holiday season. Everybody feels like celebrating and some people tend to just swipe their card a little too fast. So, as a result of that. 25 percent of people who actually took a debt during the holiday last year are still carrying that debt.
From last year, up until today, what we want to do is we want to do a better job at managing our money and just having a budget. when it comes to spending, the holidays, it's really not about gifts, right? so I'm challenging you to have a budget that you will stick with.
And if you have some money left over, invest it. And if you were, planning on putting it on the credit card, don't, something to consider if you want to save money during the holidays, maybe work with your family members and friends to get together and put some money together to buy a joint gift, as a family, maybe do secret center.
so each person in the family buys one gift instead of buying a bunch of gifts for everyone there. But yes, so you want to end the year strong and the first thing that you can do that's easy is to not overspend so that you can end the year, on a good note and you can start on a good note.
Number two, you want to make sure that you review the beneficiaries on all of your accounts. So from your retirement account to your brokerage account, investment account, life insurance or any type of insurance that you have with a beneficiary, your bank accounts, any financial account that you have that asks for a beneficiary, take the time to go back and look at it.
Who you have on there, right? Because sometimes people even get divorced and they forget to update and they get remarried and they have their, ex spouse on the policy. That's definitely not something that you want to do. So you want to take the time to review or sometimes people select a minor as a beneficiary.
The
So there are several issues depending on the states. The laws are different. Some laws won't allow. Miners to get access to the money until the rich majority. But even if that's the case, do you really want your 18 year old or your 21 year old to have access to a significant amount of money all at once?
that's why you want to consider maybe having a trust or having someone else as a beneficiary that will be able to handle that responsibility, right? also you want to have a list of your accounts and you want to have them secured in a safe place and, it can also be something that you do as part of your estate plan.
All of this information Is available as part of your estate plan or your will. the next thing that you should do is you should review your estate plan.
And no estate planning it's not just for wealthy people. It's for anyone who has people on this. birth that they care about, right? Because something that you can do, even if you don't have money right now, or even if you don't have wealth right now, is have life insurance so that in the event that something were to happen to you, your loved ones would be covered, right?
in addition to that, if you have minor children, just simply having a will, is not to be enough. So having a will is very important. That's a good first step. But when you have minor children, you want to have some types of control in terms of when your children can receive whatever, wealth you have left behind,
you also want to have an estate plan so that you can designate a guardian for your minor children, right? And all those things, unfortunately, you can't do that in a will. That's when you have to start thinking about having an actual trust.
And so when you have, a trust, you can designate someone as the executor of your estate. now is also the time to think about things like having a durable power of attorney, because in the event that you were to become even if you have a power of attorney right now, it would be null and void.
Right. So think about that. Think about having a healthcare proxy so that your loved one know exactly what you want done. If something were to happen to you, also consider whether you have enough life insurance, good rule of thumb is anywhere between 10 to 15 times your income is what you should have in your life insurance.
I don't know, maybe in the, Past five years, your income has significantly increased, but you never adjusted your life insurance. So think about whether you should get a second policy. But anyways, now is a great time to really take the time to look at what your plan looks like today, whether you have one or not.
And start taking the steps so that you can have a solid estate plan. And it's always something that's great to revisit at least once a year. Okay. So the next thing you want to do is you want to review all of your subscription and negotiate your recurring bills. That's a great way to save money.
So look at all of the subscriptions that you have. Do you actually use all of them? Do you need all of them? identify some that you can cut off so that you can save money in 2024? also whether it's your cable bill, your phone bill, Can you reduce the cost? And sometimes it's a matter of just shopping around.
Other times it's a matter calling your current supplier and negotiating, we reduced our phone bill by half, and we actually are paying less and getting a lot more in terms of, unlimited data, which we didn't have before.
I encourage you to take the time, before the year ends to kind of save some money on your monthly expenses. I'm all about saving money, right? So the next thing that you can do is you can start planning for tax purposes, right? again, there are so many accounts that allow you to Basically invest money and pay less in taxes from your 401k, 403b, IRA.
I mean, there are several options depending on your situation. And so what I like to do is I like to work backwards. So I know this is how much money I want to put it into those accounts. what do I have to do in terms of my expenses to be able to save and invest the amount that I have in mind. So. If you're at a point where you're thinking about maxing out your 401k, for instance, right?
How are you going to be able to do that? Well, you have to look at your budget and you have to basically create the line item in your budget for that. So look at your, tax planning and how you're going to be able to leverage the tax advantages that you have to invest. And also, be able to hit your investment goals and, save money on taxes in the process.
I'll throw in a bonus thing that I think you should do every year. Anyways, when you invest, right? It's important that your investments are aligned with your risk tolerance. Once a year, it's always a good idea to rebalance your portfolio, you look at your asset allocation.
does it match with how you feel about investing? you invest in individual stocks? Is that something that you're comfortable with? And if you are, should you consider lowering the percentage? Do you invest in bonds? Because that's like easily accessible and it's not going to be subject to as much volatility as, stocks.
Do you have the proper allocation there? Do you invest in index funds or ETFs, which will help you diversify your portfolio? Do you have enough exposure in different industries? Or are you mostly invested in like one or two specific industries? Again,
as we invest, we want to be able to manage our risk. So let's make sure that we are investing in a way that makes us comfortable that, we're not investing past our risk tolerance level. So once a year, it's always a good idea to look at your investment and make sure that it's properly aligned.
All right, so I really hope that these. Five tips will help you end 2023 on a strong note and start 2024 on a solid financial footing. I hope that you enjoyed this episode and I can't wait to see you back here next week for another episode of the Jamis podcast.