Guest column: Time for year-end financial evaluations and resolutions

We’re closing in on the end of the year, and while your checklist may seem impossibly long, one item that should make the cut is a review of your finances. It’s important to take the time to at least annually review your financial plans, and doing this as the New Year approaches provides you with an opportunity to evaluate and optimize your coming year’s plan. Here are some items to consider.

Consider Dependent or Family Changes

Throughout the year you may have experienced changes that impacted your long-term finances, yet you may not have adjusted for these in your goals or plans. These may include items like adjusting the number of family members that should be considered or the employment status of these individuals.

Align Your Goals

Have any events in your life over the past year altered your goals? Have you extended or shortened your retirement date? Do you plan to buy a new home that will reduce your retirement savings? Is there a new child or grandchild that you want to help save for college? Most families experience at least one of these changes, so if you answered yes to any of these questions, it’s important to understand how it will affect your financial plans.

Maximize Savings

Year-end is when many people receive additional funds that can be used to increase savings. Rather than earmarking work bonuses and holiday gifts as a new source of spending, consider these as an opportunity to improve your chance to achieve your financial success. Investments made in your financial goals can produce much greater long-term benefits than items purchased over the holidays.

Review Investments

The financial markets adjust throughout the year, so take the time to review the affect this had on your investment accounts. Maintaining the appropriate balance in your portfolio is one of the most important keys to success, so resist the temptation of unnecessarily putting this off.

Automate Investment Plans

Take advantage of automation where you can. Sign up for systematic investing with retirement plan and investment accounts, leverage auto increases when possible, and consider asset allocation funds that have auto allocation and rebalancing. In addition to simplifying your process, these items help eliminate the emotion market changes can bring as well as the temptation of delaying investments.

The past 12 months have been anything but ordinary. Take the time to review, reflect and refocus to make sure your priorities match up with your financial plan. Doing so may improve your ability to reach financial goals and will increase your confidence in the plans you’ve established.

John Leis is Vice President of Personal Financial Solutions for American Century Investments. He may be reached at 816-340-4271 or john_leis@americancentury.com.

This story was originally published December 17, 2015 at 6:31 PM with the headline "Guest column: Time for year-end financial evaluations and resolutions."