Year-End Financial Planning: How To Maximize Your Financial Plan’s Well-Being


Staff report

It’s December and the year has gone by in the blink of an eye. So, what can you do to ensure your financial plan’s health in the last few weeks of the year?

We sat down with Rachel Barzilay, CAP®, CFP®, CRPC®, Managing Director, Wealth Management Advisor and Senior Portfolio Manager with Merrill Lynch Wealth Management in Boca Raton to discuss tips that can help you prepare for the end of the year – and the year ahead. Be sure to carve some time out to accomplish these tips.

How can you ensure your portfolio is in good shape heading into the new year?

It is extremely important to reassess your portfolio at the end of the year and rebalance it. I encourage everyone to take a closer look at which areas of your portfolio performed well and which areas underperformed, in case changes are necessary to get you back on the long-term track. That said, changes might not be necessary, which is why it is best to consult with an advisor who understands your long-term goals. Many recommend balancing your portfolio at least annually, and as you begin to look ahead to the new year, December is a great time to give your finances a check in.

How can you prevent the debt pile-up?

With the holiday season upon us, you may already be planning on ways to rack up your credit cards. However, be sure that you are only spending what you can afford. Paying high interest rates on your credit cards can wreak havoc on an otherwise solid financial plan. Make purchases that are within your budget, and plan to pay those credit cards off as soon as possible, preferably month-to-month, to avoid high interest rates and late fees.

How can you best prepare yourself for the upcoming year?

Looking at the past year’s spending can be a great way to plan your budget for the upcoming year. The end of the year is the perfect time to reassess how much you spend and reallocate funds for a year of stable finances. By combing through your purchases, you might also become more aware of some subpar spending habits. Seemingly small purchases, such as daily coffee or carryout lunches, can quickly add up, and the total costs at the end of the year can be eye-opening. After going through these steps, perhaps you will find that you have more to allocate toward retirement, or that you are in a better position to plan for a lofty financial goal, such as a big vacation – the task is certainly worth the reward.

Checking in on your budget and balancing your portfolio at the end of the year can help you take inventory of what you have (and could have) in your bank account. An out-of-control budget can cause financial anxiety, as well as overall unhappiness. It is important to make a specific, drawn-out plan, as opposed to mentally planning. This exercise will also help you stick to your plan and meet your goals. Consider making financial wellness your New Year’s resolution by creating a financial plan with a trusted advisor.