My Financial Resolutions

Money has a way of finding me, and I have a way of spending it.

I’d love to blame my faulty relationship with money on the global pandemic, but tbh we weren’t really close before the ‘rona. It had a way of finding me, and I had a way of spending it. As someone who is building a career in finance, it’s truly appalling that I know what to do but often find myself choosing a different path. It wasn’t until the world shut down, that I had time to assess my financial affairs. Over the last year, I gained an understanding of my assets and liabilities alongside my life goals, which in turn has enabled me to produce a flexible action plan for my money.

Step 1: Envision your ideal life and identify the aspects that will cost

• [emergency fund]: I don’t believe this is the last pandemic or economic crisis in my lifetime
• [student loans]: I left business school after one year, and eventually I plan to finish
• [rent]: If and when the COVID dies down, I’ll be moving back to New York
• [cost of living]: New York
• [wedding]: I really love a good party
• [children]: I know that at some point I want a family
• [house]: I hope to buy a home individually or with that family
• [car]: If and when I leave New York
• [children’s college tuition]: Does one need children?
• [late-term medical bills]: As an American, it will be a cause for concern as I age
• [retirement]: With enough money to float emergencies that arise

Step 2: Determine if these are short-, intermediate-, or long-term costs

• [short]: emergency fund, student loans, rent, cost of living
  
• [intermediate]: wedding, children, house, car
  
• [long]: children’s college tuition, retirement, late-term medical bills, retirement

Step 3: Establish your financial focus for the next 12 months

1. Given the uncertainty felt from COVID19, I would feel more comfortable if my emergency fund covered me for an entire year.
2. I want to focus on growing my net-worth, by reducing my liabilities, specifically my student loans, and in turn growing my assets by investing in new asset classes
3. I need a plan to reduce my taxes because it is my largest, uninformed expense
4. Set a new strategy for my stock portfolios, including my retirement fund

Step 4: Craft a high-level plan to help move the train in the right direction

1. [emergency fund]: Over the next year, 25% of my income will be deposited into a high-yield savings account, granted the rates are low
2. [student loans]: I plan to set a date by which my loans are paid off, based on the excess capital from my monthly budget
3. [taxes]: For once I want a clear understanding of the tax code so that I can take full advantage of the credits and deductions
4. [investing]: I’m refocusing my active portfolio on private investments, currencies, and real estate while maintaining a passive investment fund for retirement.

Step 5, 6, 7… is really to go deep, so you can put dates and deadlines on the calendar as well as set habits to achieve these goals. It will be a lot of planning, strategy, and perhaps a bit of research, but your finances will be all the better for it.