When you think of Groundhog Day, what comes to mind first? Bill Murray, the groundhog or the dreaded possibility of six more weeks of winter?
What’s most uncanny about Groundhog Day is that Punxsutawney Phil has one job to complete which is: he leaves his den and then retreats back inside. Every year he comes out, and then goes back in. He repeats the same action year after year in hopes of helping the turmoil of mankind’s problems associated with the weather.
Now imagine yourself as a savvy investor and your tactics are to invest in the same “investment vehicle” over and over, every year, hoping to achieve different or in this case, better results. Repeating the same mistakes every year could put your finances in a state of havoc.
Here are four financial behaviors not to repeat every year:
1. Not Checking on Your Statements: We’ve been raised to believe that technology is near perfect. Many who have opted into receiving digital statements for their financial accounts rather than paper statements in the mail, have a tendency to look past them, assuming everything is in good order. Have you ever checked a statement and noticed something was incorrect, or were charged more than you should have on a purchase? Setup a “checks and balances” system for yourself to ensure if unexpected charges or fees show up, you can handle it right away.
2. Not Knowing Your RMD’s: When an individual turns 70 ½ and has an IRA, one must start taking their Required Minimum Distributions every year. The worst thing you can do is NOT be proactive and wait until the end of the year. Scrambling to ensure you’ve met your Required Minimum Distribution requirements at the end of the year is sure to cost you a headache. If you want your RMD to be taken at the end of year, just make sure everything has been setup to be done so ahead of time.
3. Saving Enough for Retirement: I had a conversation with one of my client’s son who is in his early 30’s. He recently changed jobs and started working for a new company. He did not rollover his 401(k) but wanted to cash in the 401(k) to pay off some debt. While my client’s son made that statement, I think he saw the grave look of concern on my face because he stopped before he could even finish. Even though he has a new job where he could start contributing to a new 401(k), that doesn’t mean he should forget about all the hard work and progress he already made. Save, save, save for retirement – you won’t regre it.
4. Self Employed and Not Saving for Taxes: Many, if not all self-employed people have to pay “Uncle Sam” every year. I’ve seen many people in my day who did not save and put aside the necessary monies to cover their taxes therefore needing to dip into their savings accounts to cover the costs. This is a major “no-no”. Prepare today for a better tomorrow!
Bill Murray quoted in the film, Groundhog Day, “Well, what if there is no tomorrow? There wasn’t one today.”
Imagine never having tomorrow but only having today to repeat the same thing over and over. If you were stuck in today with no tomorrow, would you be pleased with your financial status? If you answered no to that question, then it looks like you’ve got some tweaking to do.
If you need help for a better today so you don’t have to worry about tomorrow just give me a call.