Date: January 10, 2017

Top 15 Financial Resolutions for 2017

It’s amazing how powerful the turn of the calendar can be. New Year’s resolutions dominate the landscape with all of the weight loss programs and workout products at the top of the list. I’ve never been a huge “resolution” person, probably since there’s just too much I need to change and it’s a little overwhelming!

But each year, I may pick one single project or thing that needs to get done and is manageable. Last year, my goal was to spend five consecutive weeknights at home (by 5pm) with my family. Between coaching my kids’ teams and their activities, I was unable to accomplish that. That will happen in 2017 plus a new goal on the business side.

Below is my full list of resolutions for 2017 which was partially unveiled and discussed on WTNH’s Good Morning CT Weekend. You can watch that HERE.

1 – Take a financial inventory of your current holdings

Make a list of all accounts and holdings on a piece of paper or Excel spreadsheet of their values at the end of 2016 and 15 (and as far back as you have data). Compute the return from one year to the next. Using 2007 – 2016 should give you a good cross section of market environments with strong up years like 2013, a strong down year, 2008, and a number of strongly volatile and very average years.

Determine the composition of your portfolio: What percent is in stocks, bonds, currencies, commodities, cash, etc.? Try to understand why something did better or worse than expected and consider adding or withdrawing where appropriate. Remember, the most successful investors are the ones who add to their best investments after they experience a challenging period. Make sure you understand what you own and why!

2 – Photograph inventory of your home

With modern technology, it’s never been easier to take pictures or record video. Start on the outside and make sure to capture anything and everything than can be lost due to fire, storm or theft. You, your insurance company and the authorities will be happy you did.

3 – Organize key financial documents

Should tragedy strike your family, make sure that all important documents can easily be located and used by other family members, lawyers or the executor. These documents include but are not limited to will, power of attorney, bank, brokerage and 401K accounts, insurance, mortgage, deeds, etc.

4 – Create/update will

More than half of all Americans die without a will. That is one amazing statistic. Most reason that they just haven’t gotten around to having one done. Laws vary by state as to exactly what happens if you without a will. With estate laws about to change again, there are a variety of reasons to have an updated will. First, you are able to decide exactly what share of your estate and what property goes to which individuals. Otherwise, and especially if there have been more than one spouse and multiple children from those spouses, the different parties will spend a lot of money and time fighting over the assets. If you don’t have an attorney or don’t want to pay one, at least buy the software and do it yourself.

5 – Update beneficiaries

Retirement accounts like IRAs, 401Ks and annuities have beneficiaries. That is, a person, people or entities you want to receive those assets after your passing. Make sure your beneficiaries are still alive and you still want them to receive that predetermined portion. Many times beneficiaries’ family status changes and account owners no longer want them to receive all or any of their account. Additionally, accounts grow in different ways and significant growth of an account may skew the intended gift.

6 – Check credit report

There are several services that offer to supply your credit report on an annual basis for free. Make sure to check all three credit bureaus. Identity theft and credit fraud have become pervasive this decade and it takes a very long time to correct problems. If you see a negative mark on your credit, even a small one, make sure to address it until it has been fixed. It may take a while. Additionally, make sure to close any and all accounts and cards not currently being used as they can negatively impact your credit.

7 – Create a budget

If you notice, I didn’t say to live by a budget, just to create one. That’s the hardest step to take, the first one. Simply either keep track of everything you spend or for a few dollars, purchase a program like Quicken to track it for you. You will be amazed how your money gets spent over the course of the year.

8 – Pay down/off high interest rate credit card debt

This should be the most obvious tip as the higher the interest rate, the more difficult it is to pay off. With the Federal Reserve raising short-term interest rates in December and likely to raise a few more times in 2017, just paying the monthly minimum will take you decades to pay off your debt. That is among the worst mistakes you can make. Whatever it takes, even at the expense of retirement plan contributions, you absolutely must pay down and then off high interest rate credit card debt.

9 – Consolidate debt

Credit card companies are thirsting for new business and luring customers with all kinds of 0% interest rate and free transfer offers. Whether or not you can pay off/down your credit card debt, you should definitely consolidate as many of your credit cards with balances as possible at preferably 0% interest.

10 – Refinance your mortgage

The 35-year bull market in bonds ended in July 2016. With the bond market running in 30-40 year cycles, the odds greatly favor that long-term interest rates, not the ones the Federal Reserve sets, will be rising for the next few decades on balance. Long-term mortgages key off the 10 year treasury note which has already rallied 100% from its 2016 bottom. If you haven’t already refinanced your mortgage when interest rates were at record lows, use any weakness seen during the first four months of 2017 to refinance.

11 – Establish an emergency fund

Working people should have an emergency fund of at least 3-6 months of expenses in case an unexpected event occurs, like losing your job. This fund should be very liquid and easily accessed. If you are single and in your 20s, you can probably get away with a smaller fund. The older you are and the more people who depend on you means the fund should be larger. Having available credit on a credit card is not an acceptable emergency fund.

12 – Rebalance 401K and other investment accounts

While I advocate rebalancing quarterly, most investors, especially those who do not work with a financial advisor, do not even do this annually. This is vital for long-term success. Let’s say your 401K account is allocated 70% to equities and 30% to fixed income. Over the course of every year, stocks and bonds perform differently and that allocation has likely changed, sometimes dramatically. Rebalancing sets that account back to the 70/30 or whatever you chosen allocation is.

13 – Increase 401K or other retirement plan contributions

For the vast majority of Americans, employer sponsored retirement plans are the best form of saving for retirement. With old fashioned, traditional pension plans going the way of the rotary dial phone, many people are offered 401K plans with some employers giving certain contribution matches. Participants should strongly consider raising their contribution percentage until it is maxed out, even if that means just a few dollars a week.

For 2017, the maximum 401K contribution is $18,000 for individuals under the age of 50. For those over the age of 50, the IRS allows an additional $6,000 catch up provision. For IRAs, the maximum contribution is $5,500 for those under 50 with an additional $500 catch up provision for those over 50.

14 – Sell winners

In my Top Financial Tips to Year-End (, I suggested that investors should hold off selling their winning positions as there was a good chance that capital gains taxes would be cut in 2017. With the calendar turned and a tax cut likely to be seen in the second half of the year, but retroactive to January 1st, investors with taxable gains who were looking to sell in 2016 should now consider selling with the prospect of lower capital gains taxes.

15 – Understand exactly what your health insurance covers

This is not your parents’ old health insurance coverage! There is no more blanket coverage. Deductibles are very high. Copays are high. There is in network, out of network, coinsurance, urgent care, emergency room, etc. With the ObamaCare exchanges failing and premiums skyrocketing, insurance companies are not going to absorb the cost. You are! Don’t wait until your family gets a negative surprise to understand the coverage you have and don’t have.

BONUS – Travel to Europe

It was only 9 years ago when supermodel Gisele Bundchen demanded to be paid in euros instead of dollars. Around that time, it cost $1.60 to buy one euro. I vividly remember doing several media interviews declaring that the euro was peaking and a new, long-term, secular bull market in the dollar was in its infancy. Since Gisele’s embarrassingly poor call, the euro has collapsed from 1.60 to 1.01, or 37%, making travel to mainland Europe the cheapest since 2002 and on its way to becoming even more affordable this decade.

If you need help working through these resolutions or some of your own, please call the office directly at 203.389.3553 or email

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Paul Schatz, President, Heritage Capital