Better Financial Health in 15 Minutes (or less!)

Preparing for the New Year: Financial Planning Tips and Strategies

• Stacey Hyde

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Prepare to step into the new year equipped with financial wisdom and strategic foresight. Join me, Stacey Hyde, as I dissect the intricacies of financial planning in a world where time seems to fly by. Wondering how to make tax season a breeze? I'll walk you through the essential steps of organizing your financial documents and keeping track of significant expenses like charitable donations and property tax payments. For homeowners, being mindful of annual costs such as insurance can prevent unwelcome surprises, while ensuring your car is well-maintained could save you from unexpected repair bills. And if a new car is on your wish list, I’ll guide you on how to make the most of year-end deals, providing insights on evaluating models, insurance costs, and financing options.

Whether you're contemplating major purchases like a new car or home, or planning home improvements, having a solid financial strategy is crucial. We'll explore how to save effectively for a down payment, earn interest on your savings, and understand the various costs associated with home buying, including mortgage insurance and closing fees. From choosing between new flooring or a fresh coat of paint, to updating kitchen countertops, having financial clarity will make these decisions less daunting. My mission is to equip you with practical advice and actionable insights to confidently face whatever financial decisions come your way in the upcoming year.

Envision Financial Planning. 5100 Poplar Avenue, Suite 2428, Memphis, TN 38137. (901) 422-7526. This communication is strictly intended for individuals residing in the United States. Advisory Services offered through Envision Financial Planning, a Registered Investment Adviser.

Speaker 1:

Hi, I'm Stacey Hyde and I'm back for another episode of Better Financial Health in 15 Minutes or Less, and, as we are right at the end of another year, yes, I feel like my parents and grandparents now saying how fast time moves, but it doesn't stand still. It does move, and so I think it's important, as we end the year, to make sure that we gather things that we are going to need as we move into the new year. Make sure that you know where your account statements are. It's fine that you have them online. Make sure you can log in, because it'll save you a lot of time when you get ready to do your taxes if you already know where those are. If you have given charitable gifts of meaningful amounts, if you've paid property taxes year to know what exactly you paid and when, because a lot of times, especially if you don't escrow meaning your homeowners insurance and your property taxes are not included in your mortgage payment or if you're one of the lucky few who have paid off your mortgage, you want to make sure that you know when those come about. Most people pay their car insurance monthly, but they pay things like homeowners insurance once a year, and so you want to make sure that you know what those sort of big expenses are and that way you can plan for them. And, because those are not unexpected, they may catch you by surprise if you don't plan ahead. But you want to make sure that you've set the money aside for that and you're prepared.

Speaker 1:

Also, look at your car. Make sure that you've taken care of the maintenance that you need on it. Do your tires need to be rotated? Does it need service? Because while that's never fun to pay for, it's a lot less expensive than buying a new car. Or if maybe you've been putting off buying a new car and you're thinking that you need to start looking. Usually end of the year is a pretty good time because the dealers are getting in their 2025s and they can oftentimes make you some very good deals on the 2024 models. But you want to make sure that you've got kind of everything lined up so that you're prepared for that and yes, that's the word I've already used 32 times in this one video being prepared.

Speaker 1:

So if you start looking for a vehicle, make sure that you look at consumer reports. Look at how they hold their value over time, how much car insurance on that vehicle is going to cost. Maybe, if you're between two cars, send a note to your insurance agent, say, hey, I'm considering this car versus this car. Does it make a difference on my car insurance rate which one I purchase? Because it may be no change at all, but it may be pretty different on the two cars because one's a lot more expensive to repair if something were to happen, and you can be prepared for that.

Speaker 1:

You can also do some homework on financing. Is that dealership offering promotional interest rates to try to sell cars? A lot of times they are, and that can be cheaper than what you could get at your bank. Also, credit unions tend to be more affordable on interest rates, particularly for used cars. So you want to kind of start looking at that kind of stuff so that you're ready for whatever life throws at you.

Speaker 1:

Or if you're thinking about wanting to buy or sell, or sell and buy another home in the year, you want to start making sure that you're accumulating your down payment, that you're earning some good interest on that money while you wait. We've got a video on that that you can listen to about how to make sure you're earning at least 4% on your cash with no risk, so that you're ready for these things as they come about, because purchasing a home is very expensive. For most people it's the largest expense they've ever incurred, and when you factor in the interest you'll pay and the fees you pay at closing, it multiplies. And so you want to make sure that you're ready for that, understanding what you have to put down if you're ready for that, understanding what you have to put down if you're trying to avoid mortgage insurance, because that can run up your monthly payments as well, and you also have some money set aside to you know, there's always going to be something.

Speaker 1:

Even if the house is new, there's going to be something you don't like that you want to change, whether it's paint that's not super expensive, relatively speaking, or different flooring, or updating a bathroom or changing out kitchen countertops. So you want to make sure you've got that money set aside too. And guess what? If you buy a bigger house, there's probably going to be some rooms that you don't already have furniture for. So you really want to make sure that you've kind of thought through all of that. It's not just the cash that's going to take the clothes, it's all these other things. And you also want to make sure you've got some cash reserves because, let me tell you, as a homeowner, stuff happens the hot water heater goes out, the HVAC system goes out that's a really expensive one or you need a new roof. All those things can add up and they always seem to happen at an inconvenient time. So you want to sit down and kind of lay it out and see where you are and kind of take stock of where you are, what your personal balance sheet looks like.

Speaker 1:

What do you own? And I'm not talking about like stuff, like jewelry or anything like that. I'm talking about financial assets, cash in banks, 401ks, roth IRAs, investment accounts, crypto, whatever you own. You want to understand that. Then, what do you owe? What are your payments? If you're trying to buy a home, you want to get those credit card balances paid off. You want to try to pay down on those student loans. You want to get rid of as much of that consumer debt as you possibly can, so that one that'll improve your credit score and two, it'll make paying for that home much more affordable.

Speaker 1:

Or that new car, or a new to you new car, and so you just want to make sure that you're prepared and spending a little bit of time sort of looking at it. Getting your paperwork together so that you know where your stuff is, can really be helpful, because you're not trying to beat yourself up or anything like that. You're just trying to say where am I and how can I improve my personal balance sheet. So take a little bit of time and, if you're in the market to buy a home or to buy a vehicle, new or used, do a little research, make sure you understand the reliability, what the service is like, for what you're getting, what the insurance is, and then go from there Good luck. I hope you've had a wonderful 2024 and we wish you the happiest of new years in 2025. Thanks for tuning in. This has been another episode of Better Financial Health in 15 minutes or less.