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Jump-Start Your Financial Plan for 2022!

Cypress Wealth Services

January 2022

Have you found yourself wishing others a Happy New Year with more conviction this year? After our high hopes for a happy 2021 didn’t quite pan out, a new year can be overwhelming to think about. As we continue on the slow road back to “normal” following the pandemic and resulting economic shutdown, here’s some good news: There are actionable steps you can implement today to take back control of your finances and make 2022 a true fresh start. Let’s discuss four ways to get started now.

1. Set Financial Goals

The first way to jump-start your financial plan is to set financial goals. Do you have a goal for your finances or are you just crossing your fingers and hoping you have enough for the lifestyle you want?

Specific goals with defined timelines will help to determine the best course of action, including how much risk you can and should take with your money. For instance, if you’re looking for a guaranteed source of income, then you will probably want to stick with investments that will provide long-term security. Conversely, if you are looking for substantial growth, then you might want to take on more risk and invest less conservatively. Every dollar in your portfolio should be working toward a specific goal.

Remember that the best goals will be SMART:

  • Specific: The more you can identify exactly what you’re saving for, the easier it will be to work toward it.
  • Measurable: As much as possible, try to identify how much your financial goal will cost. Do the research to figure out what you need to save so that you’re able to see tangible progress along the way.
  • Attainable: Make sure your goal is realistic and achievable. This might require some self-reflection or reevaluation of your priorities.
  • Relevant: Ask yourself which goals align with your core values. Remember that your finite assets will be split amongst your seemingly infinite list of wants. The more you can scale back your list to what is truly relevant, the quicker you’ll be able to achieve each goal.
  • Timely: Identify the timeline for each goal so that you can prioritize which ones need to be addressed first and how much risk you can afford to take.

2. Build Up Your Savings

If there’s one thing the last two years have taught us, it’s that it’s crucial to prepare for the unpredictable. Whether it be a pandemic, a lost job, or rising rates of inflation, sufficient savings can mean the difference between staying afloat during uncertain times and not having enough when you need it most.

If you’re not saving already, take steps to start putting a portion of your income away every month. Usually, 10-15% of pre-tax income is a good guideline. Ideally, it is recommended that most people should have at least 3-6 months’ worth of non-discretionary expenses saved in a highly liquid, easily accessible emergency fund before saving toward other goals. Either way, consistent savings are the cornerstone of any solid financial plan.

3. Reevaluate the Risk in Your Portfolio

As mentioned in Step 1, risk is fundamental to investing. Even “investing” by hiding cash under your mattress involves risk, since there’s always the chance of a break-in or increased inflation eating away at its value. To jump-start your financial plan in 2022, be sure to reevaluate the amount of risk you are taking in your overall portfolio.

It’s not uncommon for a portfolio to become unbalanced as the market ebbs and flows. What may have started out as a 60/40 allocation between stocks and bonds can easily become a 70/30 or 80/20 allocation, which is a significant difference in risk level. You may also find that you are too heavily concentrated in one type of asset or in one company’s stock. If this is the case for you, rebalancing and diversification should be explored.

Though risk is fundamental to investing, it’s also crucial that you aren’t overexposed to unnecessary risks. Take steps to evaluate your risk tolerance, based on your unique financial circumstances, stage of life, and personality, and be sure your investments align.

4. Partner With a Financial Professional

Have you found that when facing a challenge, the perspective of an objective third party can prove invaluable? Then it shouldn’t come as a big surprise that enlisting the help of a financial planner is a great way to regain control of your finances—and get a jump-start on the future. No matter where you’re at in the planning process or what goals you’ve set for your financial life, Cypress Wealth Services is here to support you, guide you, and navigate your financial challenges.

Not only do we have the tools and expertise to help you set financial goals, build up your emergency fund, and reevaluate your risk level, but we also aim to align your most important priorities (your financial needs, family values, and charitable interests) with your financial resources in a way that is tailored specifically for you.

If you’re ready to start planning for the new year with a team whose mission is to bring clarity and confidence to your financial life, call our office today at 866.888.6563 or contact one of our offices today to arrange a consultation today. Together let’s make 2022 truly a Happy New Year.

 

About Cypress Wealth Services

Cypress Wealth Services is an independent RIA firm providing financial planning and investment management to high net worth individuals, families, business owners, and institutions. Cypress Wealth Services comprises professionals with diverse backgrounds and extensive experience and qualifications. Cypress Wealth Services is uniquely qualified to serve a broad range of client needs, and their experience and expertise act as a foundation for their client service process. The firm uses The Second Growth, which focuses on efficiently protecting, growing, and transferring to their loved ones the wealth and legacy a person has already built. With financial advisors in Palm Desert, CA, Tustin, CA, and Anchorage, AK, the firm serves clients across the country in Wealth Management Services, Fiduciary Services, 401(k) Design and Management, Investment Reporting Services, Financial and Retirement Planning, and more. For more information, visit www.CypressWS.com or call 760.834.7250.