New Year’s Resolutions: Maybe This Year?

I make my New Year’s resolutions during December.  When I was younger, I’d keep a note pad on my desk so I could jot down candidates, but now I use my smartphone as it’s always available wherever I am.  My younger self would take this list and try to work it aggressively from January 1st, inevitably forgetting about it by February/March when the usual, more immediate life challenges derailed my best intentions.  As I’ve gotten older, I take these long lists and pick just two or three to work on, usually finding enough time and focus to (mostly) accomplish them.

I bet a lot of you who make New Year’s resolutions had yours derailed in 2020 by the pandemic.  My three in 2020 certainly were:  take a family vacation abroad (I’ve always wanted to see Australia), remodel an outdated bathroom, and reconnect with a church we had left a few years back.  I had done a little work on these three but when Covid entered our vocabulary it was obvious by April that I wasn’t going to accomplish these resolutions.  Instead, I got to learn about remote work, social distancing, constant hand sanitizing, and masks.  At least I got those down!

When the end of 2020 arrived, my 2021 resolutions were less ambitious.  Many revolved around simple things:  can I go to the gym again?  Eat at a restaurant?  Attend birthday parties?  While certainly not an even path, vaccination and experience gained living in Covid times has allowed most everyday activities to resume.

Now that 2022 is here I feel it is right to move back to some more ambitious goals.  I’m betting our clients feel the same way.  Here are some ideas from my checklist that you might put on yours as you think about your New Year’s resolutions, both in your life and of the financial variety.

Develop a healthy habit… or do less of one you don’t think is healthy.  It isn’t surprising one of the most common resolutions is to lose weight/exercise more.  Quitting smoking and developing a consistent sleep schedule are other popular ones.  On my list:  reducing time I spend in front of screens, like when I surf the net looking for news, or read up on University of Michigan sports (2021 was such a great year I can’t reasonably expect a repeat… limit the heartache!)

Spend more time with friends and family.  Undoubtedly, we all did more of this in 2021 given 2020’s lockdowns.  Even so, I don’t feel I’ve caught up, particularly with friends that don’t live in the area.  With travel restrictions lifted (at least in the U.S.), I’ve got a couple of ideas of friends from out of town that I’d like to visit.

Make or update your estate plan.  No one likes to think about terrible outcomes, but as they say, the only certain things in life are death and taxes.  I know many of you have estate plans already, but for younger clients this is often not the case.  Further, a lot of us put together our plans and the simple passage of time changes our life circumstances, requiring an update.  If your estate is complicated enough to require an attorney, we do have some contacts we can suggest or at least point you in the right direction.

Help us help you carry out your estate plan.  On a related topic, I’m saddened when helping loved ones implement an estate plan to learn that financial steps needed to fulfill it were incomplete. We fully understand the need for privacy, but if you share information about your plan, including any trusts you have set up, it makes the process of distributing assets far easier.  This can also help us avoid two of the most common issues we run into with estates:  outdated beneficiary designations and unfunded trusts.

Learn a new skill or hobby.  I find life is much sweeter when I’m learning and I’m lucky that I picked a career where continuous learning is part of the job description.  However, as I see my own retirement in the future (not now, but someday!), I know I will miss the continual learning and am thinking about what alternatives might fill this need.

Examine your insurance coverage.  Like an estate plan, the passage of time changes insurance needs.  For example, every young family with children should have some life insurance on wage earners to replace income needs should the unfortunate happen.  However, I often see older clients paying hefty premiums on life insurance they no longer need because they have accumulated sufficient wealth and children have left the nest.  Instead, clients with significant wealth might want to think about a relatively inexpensive umbrella policy that can pay off if an unthinkable accident or lawsuit happens.

Get Organized.  Even the best organized among us can find some aspect of their life that could use some additional attention.  I’ve found the key to accomplishing this resolution is not to pick a project that’s too big.  For example, if you haven’t updated your wardrobe in a while and your clothes have become outdated, it’s time to purge.

Increase the security of your information.  It’s a common occurrence to hear about a cyber-attack or data breach of our personal information.  There is no way to protect yourself against everything, but you can take some sensible steps to make it harder for bad actors to snoop on you.  A good place to start is locking down your credit information, which I’ve found has the added benefit of significantly reducing the junk mail promotions for new credit I get at home.

Volunteer.  Helping your community or working with others to fulfill a passion is very rewarding, particularly for those transitioning from the workplace to retirement.  For example, one of my clients joined a Covid vaccination clinic as he began to step back last year.  He plans to continue as the need remains great.

Review monthly expenditures.  I am old enough to remember the inflation of the 1970’s and, unfortunately, I see some parallels to the bout of inflation we are experiencing this year.  If you haven’t done it in a while, it’s a good time to review what you spend every month, prioritize, and economize on those down your list.

Live gratefully.  Whenever I encounter setbacks, I try to think about the good things in life.  This can be hard to do when we are constantly bombarded with news about the world’s problems, especially during a pandemic!  I don’t always accomplish it, but when I wake up every morning, I think of one good thing that I’m grateful for as I start the day.

As always, we at Provident stand ready to help you with your financial needs, regardless of whatever New Year’s resolutions you adopt.  We wish all of you and your family a very Happy New Year.

Dan Boyle, CFA