Make sure your ‘New Year’ financial checklist is in order

January is the perfect time to get your household — your financial house that is — in order. Take an inventory of your finances to ensure you’re continuing to invest in the right areas for you. Let’s get started with my top five.

1. Taxes

Yes, I know it’s a bit early to start talking taxes. But I believe knowledge is power, and the earlier you know what your tax impact will be this year, the earlier you can plan. If you’re getting a return, what are your plans for the funds? If you owe, what are your plans to make this payment in a timely manner?

The IRS filing season starts on Jan. 22, so I recommend you file as soon as possible so you know what to expect. This will also help you to receive your return earlier.

2. Shop insurance

Many employers offer a small life insurance policy as part of the overall employment package that will pay a certain amount in the event of an untimely death. However, this is often not enough to cover much beyond immediate needs, and certainly not enough to replace an income. If that’s your situation, I strongly recommend a second life insurance package to fully protect your family.

3. Retirement allocations

If your employer offers a 401(k) and you’re already enrolled in their program, does your percentage allocation still makes sense for your income? Have you received a raise or bonus in the last year? Unless you’re already contributing at a higher-than average percentage (the recommended is 10), I suggest you grow your retirement contribution with your income.

Many online retirement websites offer a login option where you can adjust your allocation percentage right from your computer, and also adjust your risk preferences (conservative, moderate and aggressive, etc.).

4. Address your debt/savings situation

This is, and always will be, the staple of financial well-being. If you don’t already have a plan to pay down consumer debt and create an emergency fund, there are a ton of resources available to help you do so. From financial coaching, to mobile apps, to budget tracking software, make this the year you knock out debt for good!

5. Consider a will and trust

This can almost be considered a first and second step, and it’s something you definitely want to consider to protect your loved ones. They’re not just for the wealthy — a will is the first step in outlining your desires for your personal money and assets if you pass away. The second step is the trust, which complements the efforts of the will and allows its creator to have complete control over all assets and timing of distribution. Otherwise, there’s a possibility of later disputes or issues with probate courts.

Don’t let your finances sit on the backburner. Make your list, check in twice, and relax knowing that your financial situation has passed its annual checkup!

This story was originally published January 18, 2018 at 12:29 PM with the headline "Make sure your ‘New Year’ financial checklist is in order."