With the beginning of 2014 upon us, you may be setting goals and resolutions for the New Year. Starting fresh is always a great feeling, but the scale of what we set out to accomplish sometimes becomes overwhelming as the year progresses.

To help you keep moving toward your goals, we've created a month-by-month checklist of some key financial tasks to consider throughout the year. You might even find that you've completed some of these items already!

January

• Establish a will or trust. Getting your affairs in order is one of the greatest gifts you can give your loved ones. If you've already established a will or a trust, review the documents with your attorney, making any necessary changes.       
• Create a budget. Establishing a monthly plan for spending and saving is essential, whether you're reevaluating your financial life or just trying to maintain good habits.  
• Get ahead on your mortgage. If you can swing it, consider making a full extra payment toward your mortgage principal, which may help shorten the length of your loan.  

February

• Review life, home, and auto insurance. Have you experienced a major life event in the past year, such as a marriage or birth? Any significant life changes may require a change in your coverage.  
• Revisit beneficiary designations. Review your life insurance and retirement accounts to ensure that the correct people are listed.

March

• Check your investment portfolio. As your financial advisor, we monitor your investment portfolio and holdings regularly. Nonetheless, you should be aware of where and how your assets are invested.    
• Explore financial aid options. If you have a college-bound child, it's wise to get an early start researching the funding options available to you. A great place to begin is http://studentaid.ed.gov. 

April

• Review your social Security Statement. Check your benefits information and earning record online, and update your personal information if necessary.

May

• Review 401(k), IRA, and SEP plans. Consider increasing the amount you contribute to your retirement savings plan. We encourage you to meet with us to discuss the investment allocations in your 401(k) or other plan.

June

• Check your credit report. Request your free credit report at www.annualcreditreport.com and review it carefully for mistakes or suspicious charges, which could be a sign of identity theft.    
• Shred old documents. Any financial documents that you no longer need should be destroyed to ensure that they don't fall into the wrong hands.

Click here for the rest of the checklist.


� 2013 Commonwealth Financial Network�

 

 

 

"Debit or credit?" You hear it almost every time you use plastic and you probably have a preferred answer.  But did you know there are some circumstances when one might be better than another?

 

Here are five situations when you might want to choose credit over debit:

 

When shopping online, there's no question: you should always use credit because it's much harder to get a refund using a debit card than it is with a credit card.

 

Your chances of successfully getting a refund for online scams - one of the biggest complaints the Better Business Bureau (BBB) gets every year - are far greater with credit than debit. In fact, claims over purchases of $50 or more must be resolved within 60 days, as mandated by Federal law.

 

Making deposits online is another area where the BBB receives many complaints; so paying a deposit with a credit card is another good way to safeguard your transaction.

 

If you have bad credit and are trying to build it back up, you might want to consider using a credit card whenever possible. Debit card transactions are usually not reported to the major credit reporting agencies.

 

Provided you pay the balance off at the end of every billing cycle and don't spend money you don't have, this can be a great way to build up credit.

 

Are you worried that this system will have you racking up too much debt? Set up a separate bank account just for the money you plan on spending with the credit card and then transfer the money to your credit card as you spend it.  

 

You can also track your real time spending using a free money management tool like Mint.com.  With Mint, you will be able to easily track how much money you've spent and rebuild your credit, while still maintaining financial responsibility.  

 

 

A lot of people don't like recurring payments even though they make it easy to pay your bills on time.

 

One problem with using debit for recurring payments is if you make an accounting error, the payment will still go through and you'll have overdraft charges on top of the bill.

 

Even if you only overdraw a few times a year, the high fees add up quickly. Using a credit card for your recurring payments reduces the risk of accidentally overdrawing your bank account.

 

Many travel-related purchases, like rental cars and hotel rooms, require a credit card when checking in.

 

You also might be required to make some kind of a deposit when you make a travel reservation. If you use debit instead of credit to make a deposit, the money is immediately debited from your bank account, putting you out several hundred dollars in cold, hard cash.

 

Finally, many credit card companies offer premium points for customers making travel-related purchases or include extra services, like extended insurance on car rentals.

 

 

Know your credit card's reward system inside and out to make the most of your big-ticket spending.

 

Of course, you should always save up cash for any big-ticket items before you throw down your credit card.  Mint.com's "goals" tool helps create a savings plan that allows you to reach your goal easily over time.

 

As long as you have the cash on-hand, paying for pricey items on a credit card and then paying the balance off immediately is a great way to take advantage of your credit card's reward system.

 

Credit cards tend to offer more in protection and rewards. If you're very good at budgeting and don't overspend, there are few reasons not to use a credit card - especially if you avoid interest charges by paying off the balance at the end of each billing cycle.

 

Still, most people will not find this a realistic option. These people should only use credit cards when fraud is a concern.

 

Read the article here.

 

Over the course of his career, Dennis Miller, a contributor to investopedia.com, has consulted for many Fortune 500 companies, training hundreds of executives to effectively communicate the value of their company's products to their customers as a retirement mentor.

He has spent countless hours analyzing the habits shared by successful retirees. Six stand out, which he urges us to adopt sooner rather than later.

1.   Cut the financial cord with your children. All parents have one basic responsibility: to equip their children to survive on their own, both emotionally and financially.

Retirees are often the wealthier members of an extended family-or they are perceived as such. But having money does not make you a bank. If a family member needs money, let him or her borrow it elsewhere. The wealth you've accumulated has to last you the rest of your life. The best way to remind your family and yourself of this simple fact is to simply say "no."

Of course, some accidents and disabilities cannot be prevented, and there are times to rally behind family members truly unable to put a roof over their heads or food in their bellies. But for every truly unavoidable catastrophe, there are dozens more instances of parents enabling a freeloader.

You've worked too hard to sacrifice your financial independence and give up your golden years. Even if you have enough to support two generations indefinitely, being the "Bank of Parents" won't help anyone in the long run.


2.   Be your own "pension fund" manager. Independence is the real goal of retirement. That means listening to experts, but also learning to make savvy financial decisions for yourself.

Today, pensions are virtually nonexistent in the private sector. Soon they won't exist in the public sector either. So all of your retirement - including saving, investing, debt reduction, tax planning, estate planning - is up to you.

There's a lot to learn, but the information is there for the taking. I've known too many people who retired with a large chunk of change only to panic because they had no clue how to manage it. These folks were afraid, rightly so, because their lack of financial know-how made them vulnerable.

Give yourself a financial education while you're accumulating wealth so you can enjoy that wealth once you retire. Otherwise, you might leave a high-stress job for a high-stress retirement.


3.   Maximize your tax-preferred retirement savings. Only 10% of those eligible for employer-sponsored 401(k) programs maximize their contributions. There are real financial benefits to contributing to your 401(k), and it's a mistake to turn down that free money, especially if your employer will match all or part of your contributions.

In that same vein, tapping into retirement accounts to pay off bills is almost always a mistake. Unless you absolutely need the money for basic survival, you're much better off leaving your retirement money alone. Like many things in life, once you tap those funds, it gets easier and easier to do it again.

Before Congress passed the first Social Security Act in 1935, retirement was for a wealthy few. Since then, Social Security has fostered the illusion that we need not worry about money and that retirement doesn't require a large personal nest egg. Reality is far harsher.

I know people who've tried to live on their Social Security alone; now they are all back at work. A happy retirement rarely comes for people who choose to worry about retirement later.


4.   Get out of debt. Many retirees are drowning in debt. It's a topic we touched on in The Reverse Mortgage Guide when discussing why seniors are turning to reverse mortgages at an increasingly younger age.

Independence is pretty hard when you don't have any money. And don't fool yourself: if you have a million dollars in your brokerage account and a million-dollar mortgage, you're broke. Forget all the fancy formulas. When you stop paying people to rent their money, that's when real wealth building can start.


5.   Get some professional help. Even if you have a small nest egg, I strongly recommend going to a professional certified financial planner (CFP) for a regular checkup. I don't mean pay someone to manage your money, although that is an option. Much like an annual physical, however, we can all benefit from an independent, qualified professional assessing where we are and how to stay (or get) on course.

The checkup might cost a few hundred dollars, but it's money well spent. Retirees cannot afford to be penny wise and pound foolish.


6.   Get in synch with your spouse sooner rather than later. During your working years, you trade time and expertise for money. For most folks, the goal is to save enough so that they don't have to work full time to survive. Then, during retirement you trade money for time to pursue other interests. Sad to say, many people struggle to pinpoint what those interests are once they get there. One spouse might want to travel while the other is a homebody, etc.

Retirement is no fun if only one spouse is living their dream. Happier couples talk and plan how they want to spend their time long before retirement day.

Click here to read the entire article.

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Securities and Advisory Services Offered Through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. Fixed-insurance products and services offered by Chornyak & Associates, LTD are separate and unrelated to Commonwealth.

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Disclosures: Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor's. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The Dow Jones Industrial Average is computed by summing the prices of the stocks of 30 large companies and then dividing that total by an adjusted value, one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. The Russell 2000� Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Barclays Capital Aggregate Bond Index is an unmanaged market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The U.S. Treasury Index is based on the auctions of U.S. Treasury bills, or on the U.S. Treasury's daily yield curve. The Barclays Capital Mortgage-Backed Securities (MBS) Index is an unmanaged market value-weighted index of 15- and 30-year fixed-rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA), Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC), and balloon mortgages with fixed-rate coupons. The Barclays Capital Municipal Bond Index includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than 2 years) selected from issues larger than $50 million. The Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index measures the performance of intermediate (1- to 10-year) U.S. TIPS.