Jason Spicer
Jason Spicer
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The 2022 Monthly Financial Checklist To Keep Your Money Organized All Year

For many, the start of a new year often means setting goals and defining what you want to accomplish or improve in the next twelve months.

Of course, we also know that so many people abandon those goals by February or March. That’s partly due to not having a deliberate process in place to actually follow through. If you have a tangible plan, you are more likely to stay the course.

Was financial organization on your new year's resolution list? Don’t drop it after a few months. Here's a monthly guide to help you stick with it all year.

February

By February, try to define your goals for the year. A good tip?

Set SMART goals and have a system in place to track your progress.

  • S—specific
  • M—measurable
  • A—attainable
  • R—relevant
  • T—time-bound

SMART goals bring purpose, structure, and diligence to the goal-setting process. It asks you to take your goals a step or two further, so you put yourself in a better position to achieve them.

Let’s look at an example.

  • Say one of your goals is to max out your 401(k) by year-end. That’s a specific goal.
  • You can measure it because you know that the 2022 contribution limit is $20,500 (you may be able to contribute more in after-tax funds and catchup contributions if you’re at least 50). Here’s where you can set additional goal milestones. For instance, increasing your monthly contributions periodically throughout the year.
  • It’s attainable because you just got a 10% salary raise.
  • It’s relevant because you want to save as much as possible for retirement.
  • The goal is also time-bound because you know when to accomplish it—before December 31.

Setting specific savings goals is important at the beginning of the year to adjust your monthly contributions accordingly. It’s much easier to gradually reach the limits than trying and contribute a lump sum in December.

If you’re 50 or older, don’t forget about catch-up contributions! You can put away an extra $6,500 in your 401(k), $1,000 in an IRA, and once you turn 55, $1,000 in your HSA.

March

Put two items on your March to-do list:

  • Update your estate plan
  • Prepare your taxes

Spring is a great time to update your estate plan. It could be as simple as ensuring your beneficiary designations are still correct and verifying that your will is accurate. Or perhaps as complex as opening and funding a trust—here’s why South Dakota could be a great place to house a trust—filing the paperwork for your powers of attorney and medical directives, cataloging your digital estate, etc.

If you haven’t completed it already (kudos if you have), you should also prepare to file your taxes. You don’t want to wait past March since the deadline is approaching and will be here before you know it. Filing early gives you time to gather all the necessary documents, like income information or tax-deductible expense receipts.

April

April is tax month!

The last day to file your 2021 tax return (without an extension) is April 18th, and that deadline also marks the last day you can contribute to your IRA and HSA for the previous calendar year. If you have any extra to contribute, now’s the time to get the funds in.

If you filed an extension, you have until October 17, 2022. Keep in mind that if you owe money, you’ll need to make a plan to still pay it in April if possible, or else you could wind up with additional penalties and fees. While the government may wait for your tax return, they won’t wait for you to pay them.

Tax day also wraps up the previous year. With that behind you, you may want to consider a spring cleaning for your finances. Take a look at each of your budget categories: spending, saving, investing, giving, debt, etc., and notice where you’ve gone off course or where you can make any adjustments to save more or spend less.

May

After tax time, you may breathe a sigh of relief and can concentrate on other financial endeavors. Think through the following:

  • Extra income
  • Debt repayment

Consider whether you will have any "extra" income this year beyond your traditional paycheck. Maybe you have equity compensation that’s vesting, or you worked a side gig and made some extra cash.

If you didn’t already factor those funds into your budget, they might give your finances a positive jolt. Think about how you could use that money to get ahead on a particular goal, like maxing out your retirement accounts, bolstering your emergency fund, exploring alternative investments, paying off debt, etc.

Next, evaluate your debt repayment plan and ask yourself,

  • Can you allocate more to paying off your debt?
  • Are there areas where you can spend less and redirect toward your debt?
  • If not, would refinance a mortgage or other loan help you lower your payment, get a better interest rate, or pay off a loan more quickly?
  • How can you strategically avoid taking on new debt that could harm your finances?

As you prepare for retirement, it’s vital to keep your debt at bay. Take a look at where you’re at with your plan and see if there are ways you can improve it this year.

June

At this point, you’re halfway through the year—can you believe it?

You’ve had six months to work toward your goals, and it’s time for a mid-year financial check-in. You’ll want to review several items, including:

  • Your budget for the second half of the year. Now’s a great time to start thinking about saving for holiday gifts, travel, food, etc.
  • Your emergency fund. Did you have to use any of it? If so, what’s the plan to replenish it?
  • Your credit report. Take a look at your spending so far—are you sticking with the goals you set earlier in the year? If not, how can you adjust?
  • The progress on your goals. What progress have you made? What would you still like to achieve? Regular check-ins help you see how far you’ve come and what you need to do to reach your goals.

Mid-year is an excellent opportunity to realign your goals with your money.

July

Take time in July to review your investments.

First, examine your asset allocations and see if there’s any misalignment, whether with monthly contributions or market fluctuations. If you’ve noticed significant changes, you can rebalance your portfolio to put things back in order.

Review your risk profile as well. If your risk tolerance or risk capacity has changed, then you may want to update your asset allocation to reflect where you’re at now.

Remember, your investments will grow and change with you. The investment strategy that helped you retire may not be the same one you’ll use throughout your golden years. We’re more than happy to help you create an investment strategy that supports your goals.

August

Since investments are on your mind, why not take it a step further?

While saving for retirement is a top financial priority, it may be opportune to look into additional investments beyond your retirement accounts in the heat of the summer.

Perhaps you’ll increase contributions to a taxable brokerage account, so you have more spending flexibility in the next few years. You may also want to explore alternative investments like real estate property, real estate investment trusts (REITs), private equity, venture capital, etc.

We can look through some options that may be most suitable for you together.

September

September is National Life Insurance Awareness Month, making it the perfect time to inspect your insurance.

Devote September to reviewing not just your life insurance but other types of insurance protection as well, like an umbrella, disability, car, or homeowners policies.

  • Are your policies up to date? Meaning, do they still reflect the coverage you need, or have things changed?
  • Are there any policies you don’t need anymore? For example, if you’re newly retired, you may not need disability insurance.
  • Do you want to consider additional types of insurance, like long-term care insurance? There are several ways you can obtain a policy, like buying a separate one or adding a rider to your permanent life insurance policy.

Proper insurance coverage helps you protect your finances, family, and livelihood.

October

The leaves begin to change, a chill settles in the air, and year-end is right around the corner—it’s the beginning of fall.

As the end of the year approaches, you want to give yourself enough time to financially prepare for year-end. Contact your CPA now, so you already know what you’ll need to do before the holiday season sets in and things get busy.

October is also cyber security month. Review your passwords and make sure you’ve protected yourself as much as you can. It can be a good idea to change your passwords for an added layer of security.

November

Get ready to chat with HR because November is open enrollment season! Your HR team will send you all sorts of essential documents like healthcare benefits, insurance options, and more.

  • Are you and your family on the best healthcare plan for you?
  • Can you save for health-related costs in an HSA or FSA? Pro tip: make a plan for the money in your FSA since most of it won’t roll over into the following year.
  • Do you need to add a dependent to your health plan?
  • Should you increase your insurance coverage?

December

Once you’ve hit December, your financial heavy-lifting should be done.

You’ve carefully spread out the most important financial tasks throughout the year, so now’s the time to ensure you’ve crossed all your “i’s” and dotted all the “t’s”. Button up any year-end moves you want to make, like maxing out your 401(k), evaluating your investments, taking your RMDs if you need to, and giving to charity.

Year-end is a great time to solidify your giving for the year. Here’s a quick recap:

  • In 2022, you can gift up to $16,000 per person without filing a gift tax return.
  • If you’re retired, donating via a qualified charitable distribution (QCD) is a fantastic way to meet some or all of your RMDs and donate to charity. Another perk is that you can make a QCD without itemizing deductions.
  • If you want to itemize deductions, giving to charity can help.

Now that the year is done relax and rest for the new year!

If you’d like to personalize your annual financial calendar, set up some time to meet with our team today. We’d love to help you reach your financial goals!

Disclaimer

First Dakota Wealth & Trust is the fiduciary investment department of First Dakota National Bank with trustee powers to serve clients during their lifetime, during incapacity, and after death.

We help clients develop a financial roadmap to help simplify their financial future.

Please note that neither First Dakota National Bank nor First Dakota Wealth & Trust Department or its employees provide tax or legal advice. This is intended for informational purposes and is not intended to constitute legal or tax advice. Please consult your attorney and/or tax professional for advice related to your specific situation.