First, I want to take this opportunity to wish you and yours a very Merry Christmas and a happy, healthy and peaceful New Year. As we enter the holiday season we should never forget that the beauty of the holidays is not buying people gifts, but rather, spending quality time with family and friends.

I would also like to take this opportunity to thank you for giving me the opportunity to write this column and to help you make better decisions with your money. It is a privilege and honor for me to write this column and I want you to know how much I appreciate it.

I am not one who makes New Year’s resolutions. Whenever I’ve done them in the past, I either forget about them or break them in a relatively short period of time. That being said, I believe I’m always in a state of constant improvement in that I’m always trying to be a better person today than I was yesterday. One thing that we all need to work on to ensure we are better next year than we are this year, is our personal finances.

In today’s ever-changing world, it is more important than ever to be actively involved in the area of personal finance. When I say personal finance, most people think it’s just their investments or taxes; that is not the case. There are a whole wide range of areas that we need to consider in addition to our investments and taxes. These areas include estate planning, risk management and debt management. As adults, each and every one of us needs to make sure that we are up to date in these areas.

I wish I could tell you something on how you can put your personal financial affairs on automatic pilot and not worry about them; unfortunately, I can’t. We live in a world that is constantly changing. Not only are there new laws and world events that affect our personal finances, but family dynamics are also constantly changing. As a result, you need to look at your personal finances on a regular basis. Unfortunately, you can’t choose to only focus on your investments and taxes and ignore the other areas. If you do, you could find that a family emergency derails your entire financial situation.

A great starting point, particularly as we enter the New Year, is to do a personal family balance sheet. A personal family balance sheet is nothing more than a listing of all your assets and liabilities. A personal family balance sheet lets you know what you have and what you owe, and you can use that as a gauge for the future. Doing your first personal family balance sheet is always a little more difficult; however, after you do the first one, the next ones are much easier.

The world is constantly changing whether we like it or not. As the world changes, we need to analyze how that change affects our individual financial situation. Putting your head in the sand and ignoring change may provide you short-term comfort; however, it will cause you long-term pain. Therefore, as we enter the New Year, we should all dedicate ourselves to making sure at all times we keep our personal financial affairs in order.

Happy New Year and Good luck!

Rick is a fee-only financial advisor.  If you would like Rick to respond to your questions, please email Rick at rick@bloomassetmanagement.com.