• Eric Walter, CFP®

"Where Am I Going?"

The beginning of any year is a good opportunity to review your life and determine what you want to accomplish. It is especially important this year, with the Coronavirus vaccine being administered even though slowly. Spending patterns will begin to normalize: travel, dining out, clothing purchases, memberships, and event attendance are expected to increase dramatically as the risk of infection significantly declines. As you consider what’s important in 2021, answer the following:


What do you most want to accomplish this year? Once you decide, writing those goals significantly increases the likelihood you will accomplish them. Do you want to go on an expensive trip, renovate your home, buy a car, hire help, reach a specific educational savings goal…? Do you plan to retire? How much more do you need to invest to maintain your lifestyle in retirement? Write and rank your goals from most to least important. Assign a cost. Can you afford them all? Will some need to be postponed or eliminated? Do you want to invest the time in a Financial Plan to get these answers?


Where’s the money going? Knowing how you’re spending your income allows you to see if it matches your priorities. If you don’t know where your money is going, how do you know if what’s most important is the focus of your expenditures? Review your budget, if you have one. If you don’t, examine and categorize your bank and credit card expenses. We can provide the form which is part of a Financial Plan that projects future expenses. We recommend comparing 2019 to 2020. How were they different? What were your routine expenses versus one-time? Remember that 2020 was probably not a normal expense year but the pattern may carry over for part of this year.


What are your milestones this year? These may significantly change your circumstances: retirement, selling a home, moving to a retirement community, receiving Medicare & Social Security benefits, IRA required minimum distributions (RMDs). What impact will each have on living expenses, taxes, and retirement planning? What decisions will need to be made? A comprehensive Financial Plan illustrates these impacts.


How can I simplify my life? Less is more. Do away with multiple accounts so you have less to track. Ideally, use just one bank. Eliminate unused and high interest credit cards. Consolidate investment accounts i.e., multiple IRAs, savings accounts, and retirement accounts from previous employers. (Roll them into your current employer’s plan or your IRA. We can advise the best option.) Sell or donate a car, excess books, clothing, & furnishings. (Have you used it in the last year?) As Marie Kondo asks, “Does this bring you joy?”

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