5 Money Questions to Ask Yourself in the New Year

Share this article

For many people, January means a fresh start. It’s a natural time to check in on your financial progress and make plans for the new year. Here are five questions to help you get organized and set yourself up for success in the months ahead. 

1. Have there been any major life changes?

A lot can happen in a year. Before you set out your intentions for the new year, it’s important to get a clear picture of where you stand financially, as certain life events can impact your finances. For instance, getting married, welcoming a child, starting a new job, or moving to a new city often means changes to your net worth, budget, and taxes.

2. Do I need to update my financial plan?

Having a financial plan can help improve the way you manage money and the chances of you reaching your goals (e.g., paying off debt, buying your first home, etc.).

The beginning of the year is a good time to revisit your financial plan and make sure it’s still optimized for your goals. Here are a few key areas to check in on:

  • Budget: If your family has grown, you’ll likely have to rework your budget, updating your spending categories as well as your savings and investment goals (perhaps, setting up a 529 plan for your child).
  • Emergency fund: A bigger household usually means you’ll need a larger cash cushion for those unexpected expenses.
  • Investment portfolio: Are your asset allocations still in line with your goals and risk tolerance? Or is a rebalancing in order?
  • Retirement savings: Are you happy with your progress? Is there room to save more this year?
  • Insurance: Review your home, car, health, and life insurance to ensure your coverages are up to date. Talk to a financial advisor or insurance expert if you need help determining the right amount of protection for you, your family, and your assets.

3. Are my beneficiary designations or estate plan up to date?

If you own investments, retirement accounts, savings, and/or property, it’s a good idea to review your beneficiary designations. Reconfirm that the information is correct and up to date. The same goes for those who have an estate plan: Make sure your legal documents (e.g., will, power of attorney, health directive, etc.) are in order.

If you haven’t designated your account beneficiaries or put together a basic estate plan, now may be a good time to think about getting organized. Estate planning gives you an opportunity to set down clear instructions on how you’d like your affairs to be handled and who should be carrying out those wishes for you after your passing.

Keep in mind that estate planning laws vary state to state, consult an estate planner or a financial advisor if you have questions about putting together an estate plan or designating beneficiaries.

4. Have I started to plan for tax season?

Getting started early can help you get organized for tax season – giving you time to plan your filings. You may also want to evaluate your tax planning strategy. If you work with a financial advisor, get in touch to see if there are ways to be more tax-efficient when it comes to managing your assets.

Good to know: As your financial life becomes more sophisticated, there may come a time when you need to work with a tax professional to prepare and file your taxes. Here are some tips on how to choose a tax preparer

5. What are my goals for the new year?

Take a moment to reflect on your successes from last year. What worked for you? What would you like to accomplish or do better this year? Maybe you want to be more mindful about your spending or strike a better work-life balance by taking your vacation days.

Whatever your goals may be, write them down – be specific and realistic – and then make a plan. If you have a big goal, think about breaking that down into smaller, manageable steps. That way you can work toward your goal systematically with checkpoints along the way to help you track your progress and stay motivated to get across the finish line. 

Remember, goals can be harder to achieve when they’re vague or don’t reflect what you truly care about. So to help you stay motivated, consider the following:

  • What specifically do you want to accomplish? Why is it important?
  • Is this something you can realistically achieve within your desired time frame?
  • What resources or support will you need?
  • How will you track your progress?

You can get more tips on how to make financial resolutions that stick in our article here

This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this website were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.