How Rising Interest Rates Can Inspire Your Portfolio – Weekly Update for March 20, 2017

For the fifth time in six weeks, domestic stock indexes ended last week in positive territory. The S&P 500 gained 0.24%, the NASDAQ added 0.67%, and the Dow eked out a 0.06% increase. International equities in the MSCI EAFE grew by a sizable 1.99%.

Over the week, we received a series of economic updates that gave a mostly positive view of the economy’s progression, including the following data for February:

In addition, the most recent data indicated that fewer people filed for unemployment benefits the week of March 11. We have now experienced 106 straight weeks of unemployment claims staying below 300,000 people, which is a healthy labor market indicator.

Given this information—and the wealth of economic data released recently—the markets expected the Federal Reserve’s March 15 decision to raise benchmark interest rates. Last week’s 0.25% increase is only the third jump since the Great Recession, and the pace of hikes is quickening. The Fed has now raised rates in December 2015, December 2016, and March 2017 and expects at least two more increases this year.

Like with all economic data, understanding the context is critical. While interest rates are on the rise, they are still low, as you can see in the chart below.

How will rising rates affect your financial life?

When the Fed raises rates, they are demonstrating a belief in the economy’s strength. As with all changes to monetary policy, the outcomes can be complex and interconnected. While no one can predict the future, here are a few places where interest rates may affect your finances:

  1. Stocks

Stocks rose following the Fed’s announcement, with the S&P 500 gaining 0.84% on Wednesday. A strong economy is good for stocks; but anticipating exactly what lies ahead is impossible because so many outside forces impact equities. Right now, however, the markets are performing well and responding positively to increasing rates.

  1. Bonds

Generally speaking, as interest rates rise, bond yields go up and their prices go down—with long-term bonds suffering the most. However, those are not hard-and-fast rules for how to move forward. Your specific needs and strategies will determine the best way to move forward with bonds in a rising interest rate environment.

  1. Revolving Debt

If you have revolving debt—credit cards, home equity line of credit, etc.—and your interest rates are variable, you will likely see a difference in your payments very soon. In fact, a 0.25% increase like we experienced last week may cost consumers an additional $1.6 billion in credit-card finance charges in 2017 alone.

  1. Cash

When revolving debt interest rates go up, banks may quickly adjust the interest rates they charge, but they often wait to increase the interest rates they pay. Right now, the average savings account pays 0.11% interest, but some institutions offer rates up to 1.25%. Finding opportunities to capture a larger return on your cash is possible.

If you have questions about why the Fed is raising rates and how their choices may affect your life, we are always here to talk. Our goal is to give you the insight you need to feel informed and in control of your financial future.

ECONOMIC CALENDAR
Wednesday: Existing Home Sales
Thursday: New Home Sales
Friday: Durable Goods Orders

Too Close to Call: Fed’s Decision on Interest Rates – Weekly Update for March 6, 2017

On Wednesday, March 1, the three major domestic indexes all had their best performance in 2017 and reached record highs yet again. In fact, the S&P 500 hit 2,400 for the first time ever on the same day the Dow went above 21,000 for the first time. While the markets cooled slightly on Thursday and Friday, all three indexes were up for the week. The S&P 500 added 0.67%, the Dow increased by 0.88%, and the NASDAQ was up 0.44%. International equities in the MSCI EAFE also grew, adding 0.39% for the week.

In the midst of more record performance, we received a number of data updates that help improve our understanding of the true economic environment and potential for the Fed to increase interest rates next week.

What We Learned Last Week

  • Fourth Quarter 2016 GDP Readings Stayed the Same

On February 28, we received the second reading of Gross Domestic Product (GDP) for the fourth quarter of 2016. The consensus expectation was for the reading to increase to 2.1% from the 1.9% growth in January’s Advance report. However, the newest data did not show any change in Q4 GDP.

  • Manufacturing Activity Increased

The ISM manufacturing survey beat expectations to come in at 57.7 for February—the highest reading in 2.5 years and the best yearly start since 2011. Levels over 50 indicate expansion, so this data provides a positive signal for our manufacturing sector.

  • Service Sector Activity Increased

In February, the service sector grew for the 86th straight month, with the ISM non-manufacturing survey coming in at 57.6. Both new orders and business activity had faster expansion, and the employment index also increased.

  • Consumer Confidence Hit a More Than 15-Year High

The latest consumer confidence numbers from the Conference Board have not been this high since July 2001. Fewer people think that jobs are “hard to get,” and many “consumers expect the economy to continue expanding in the months ahead.” Of course, consumer confidence is no guarantee for future circumstances; instead, it measures sentiment and currently indicates that many people feel more positively about the economy.

  • Personal Income Went Up

The latest personal income data indicated a 0.4% increase in January—for a 4.0% yearly increase. In addition, the Personal Consumption Expenditure (PCE) deflator, which measures consumer inflation, grew by 0.4% in January, the largest monthly increase since 2011. The Federal Reserve follows the PCE deflator very closely, so this recent jump could be another sign that a March interest-rate increase could be more likely to occur.

These data updates are only a few of the economic details we learned last week, but together, they may help explain why the Fed could increase rates in the March 14 – 15 meeting. As recently as Tuesday morning, the odds of a rate hike were only 35%. By Friday, they had increased to 81%, due to strong economic data and remarks from Fed representatives. On Friday, Fed Chairwoman Janet Yellen said that if employment and inflation continue to change as they expect, then a change to the “federal funds rate would likely be appropriate.”[xviii]

Combined with the recent PCE deflator increases, this Friday’s employment data should help provide more context for the Fed’s decision. However, as we have seen before, no one truly knows what the Fed will decide until they make their announcement after the meeting. For now, we will monitor the data and wait to hear the Fed’s announcement on March 15.

Economic Calendar

Monday: Factory Orders
Tuesday: International Trade
Wednesday: Productivity and Costs
Thursday: Import and Export Prices
Friday: Employment Situation

Tips for Tax Deduction and Credit Planning

Tax season is in full swing — and the federal filing deadline is fewer than two months away on Tuesday, April 18. As you prepare to file your taxes, we want to help you make the most of your available credits and deductions. After all, every dollar you do not spend on taxes is one you can potentially invest toward your financial future. So, we’ve compiled tips for tax deduction and credit planning, with information on who is eligible and how you could possibly benefit.

Understanding Available Credits

Each tax credit you qualify for will directly reduce your tax payments. The IRS offers two kinds of credits: refundable and nonrefundable. With refundable credits, you can receive a refund, even if you owe less than the credit amount. On the other hand, nonrefundable credits offer a refund amount up to your tax liability.

Knowing which tax credits you qualify for can significantly reduce the amount of taxes you owe — and possibly even result in a refund. The IRS has a number of credits for individual taxpayers, but here is a list of common ones you could qualify for:

  • Earned-Income Tax Credit: For households with low- to moderate-income.
    The income limits can fluctuate, and many more people qualify for this credit than may realize it. In fact, 25% of eligible taxpayers do not claim this credit — which can be over $6,000 per household.
  •  Child and Dependent Care Credit: For households who pay for childcare.
    If you have dependent children and pay for childcare, you may qualify for credits up to $6,000, depending on your adjusted gross income (AGI).
  • Credit for the Elderly or Disabled: For taxpayers 65 and older, or those on permanent disability who meet income requirements.
    This credit starts at $3,750 and goes as high as $7,500. So, if you fit the age or disability restrictions, researching your eligibility is well worth the effort.
  •  Lifetime Learning Credit: For households paying for education.
    This credit can provide you up to $2,000 toward qualified tuition and enrollment fees. To be eligible, you must have a modified AGI less than $130,000 as a married couple or $65,000 as an individual.
  • Premium Tax Credit: For households that purchased health insurance through a federal or state marketplace.
    This credit helps people cover the cost of premiums for insurance they purchase through the Health Insurance Marketplace. Depending on your income and other personal details, you may be able to receive a premium tax credit if you, your spouse, or your dependent purchased an eligible health insurance plan.

 Planning Your Deductions

Deductions help reduce your taxable income, thereby hopefully lowering your tax liabilities. Between itemized and standard deductions, taxpayers claimed nearly $2 trillion in the most recently tracked year. That’s a lot of money! But, chances are, many people miss eligible deductions and still pay more in taxes than they need to.

Remember, when you use the standard deduction, you can likely claim a higher deduction if you or your spouse has a qualifying vision impairment or a birthday on January 2, 1952, or earlier.

If you itemize your deductions, you are likely familiar with the opportunities to write off your home mortgage interest, tuition fees, and charitable contributions. But here are a more few deductions you may be eligible to take, depending on your circumstances:

  • State Sales Tax: Mostly for households who don’t pay state or local income tax.
    If you only pay federal income taxes, you may be able to deduct your state sales tax on your federal return. This deduction is especially helpful if you made a large, taxable purchase in 2016, such as a car.
  • Business Travel Expenses: For taxpayers who have unreimbursed work travel.
    If you paid for travel to conferences, meetings, or other work obligations, you may be able to deduct your expenses. The list of potentially deductible items goes beyond transportation and lodging to include dry cleaning, meals, business calls, and more.
  • Student Loan Interest: For households paying student loan debt.
    If you currently pay student loan debt, you may be able to deduct interest, depending on your income and specific circumstances. Deductions can be up to $2,500 for student loan interest — and you are allowed to claim this deduction even if you don’t itemize deductions on your tax return.
  • Sale of Your Home: For households who profited from selling their main home in 2016.
    If you sold your primary residence last year and earned a profit, you may qualify to claim this exclusion. If you qualify, you can exclude up to $250,000 of the gain from your income – or up to $500,000 if you file taxes jointly with your spouse.

Because the opportunities to reduce your tax liabilities are vast, and these credits and deductions are only the beginning, it is best to consult with your tax preparer or a qualified tax professional. Various factors in your unique financial life will guide what options are available to you. If you have questions or would like to learn more about how you can make the most of your 2016 federal taxes, we are happy to talk. Send us an email, or give us a call at (419) 425-2400. We can also connect you with qualified tax professionals, should you seek further support.

January Reporting & An Up Market – Weekly Update for February 21, 2017

Another week, another round of record highs. Despite concerns about how France’s upcoming presidential election could affect the European Union’s stability, U.S. stocks ended the week up yet again. The S&P 500 gained 1.51%, the Dow added 1.75%, and the NASDAQ increased 1.82%—growth that represents record highs for all three indexes. International equities in the MSCI EAFE also posted positive returns, with 0.78% growth for the week.

A number of data reports also came out last week, and they tell a mostly encouraging story about the economy right now.

JANUARY INCREASES

Consumer Price Index Up by 0.6%

The Consumer Price Index (CPI), which measures the average prices of specific consumer goods and services, beat expectations and experienced its largest month-over-month jump since 2013. The index is now 2.5% higher than a year ago, a sign that inflation could be picking up.

Producer Price Index Up by 0.6%

Whereas the CPI evaluates price changes from a consumer’s perspective, the Producer Price Index (PPI), measures changes from the seller’s perspective. For January, the PPI also beat expectations, with energy experiencing a 4.7% increase.

Retail Sales Up by 0.4%

The monthly Retail Sales report shows growth or contraction in consumer demand for goods and can help indicate whether the economy is expanding. In addition to January’s 0.4% growth, the latest report included upward revisions for November and December 2016. Overall, Retail Sales are up 5.6% over January 2016.

Small Business Optimism Index Up by 0.1 points

Each month, the National Federation of Independent Business (NFIB) releases the results of its Small Business Optimism Index, which shows results from its member surveys. This report measures the mood of small business owners—the largest employers in the U.S.—and January’s results are the highest reading since December 2004. Last month’s growth comes on the back of December’s 7.4 point jump, the survey’s largest ever increase. In other words, small business owners are interested in hiring and expanding, good news for American workers and the economy.

JANUARY DECREASES

Industrial Production Down by 0.3%

Last month, industrial firms, such as factories and mines, produced a lower volume of raw goods. If you dig deeper, however, the data is likely less concerning than what it may seem at first. For example, warmer-than-normal temperatures in the contiguous U.S.—a factor that does not have to do with the economy—contributed to utility output’s 5.7% decrease, the largest drop since 2006.[xv]

Housing Starts Down by 2.6%

The number of new houses beginning construction fell in January, but future construction permits increased by 4.6%—higher than any time since November 2015.[xvi] Housing Starts are also up 10.5% over January 2016.[xvii] While the most recent report shows a monthly dip, the data indicates that housing has grown over the past year and will continue to grow in the future.

As you can gather from the balance between data increases and decreases, the January reports we received last week indicate an economy that is growing. We will continue to monitor the pace of growth and stay on top of political developments as we strive to determine what changes or opportunities may be on the horizon.

ECONOMIC CALENDAR

Monday: U.S. Markets Closed for Presidents Day Holiday
Wednesday: Existing Home Sales
Friday: New Home Sales, Consumer Sentiment

The Dow’s New Record – Weekly Update for January 30, 2017

After a brief pause during inauguration week, stocks continued to climb last week. The S&P 500 added 1.03%, the NASDAQ was up 1.90%, and the MSCI EAFE increased by 1.29%. The Dow also grew, adding 1.34%, ending the week above while hitting 20,000 for the first time ever.

Consumer confidence matched this positive performance, as the University of Michigan Consumer Sentiment measurement beat expectations in January and reached the highest levels since 2004. However, one piece of data we received last week gave a less rosy view of the economy: initial gross domestic product (GDP) reports.

What Happened: GDP Missed Projections

On Friday, we received the first report on real GDP for the fourth quarter of 2016. Growth declined significantly to come in at 1.9%—down from the third quarter’s reading of 3.5%.

Looking Deeper

Many aspects of our economy showed solid growth in the fourth quarter. Household purchases grew, business-equipment spending advanced for the first time in over a year, and inventory accumulation increased. Net exports, however, pulled growth down by 1.7%—the biggest drag since 2010—as we saw a jump in imports coupled with a decline in exports. Working to increase U.S. exports is important because it can help strengthen America’s economy, support additional jobs, and promote sustainable growth.

Without net exports pulling down economic expansion, fourth-quarter GDP could have been even higher than in the third quarter. Trade is integral to our economy, and changes in the balance between imports and exports measurably effect growth. The new administration’s potential plans to tax Mexican imports, change trade relationships with China, and restrict visitors from certain countries could affect our imports and exports—and thus our economy.

Between lagging GDP and the Dow reaching historic levels, this week showed us a range of perspectives on where the economy now stands. The markets will always have uncertainty and unanswered questions, and—as always—we must stay focused on the fundamentals that drive performance in the long term. For now, we will continue monitoring policy developments and the trade deficit to determine how they may impact economic growth in 2017 and beyond. We will also pay close attention to the economic data upon which we build our strategies for pursuing your goals.

ECONOMIC CALENDAR:

Monday: Personal Income and Outlays

Tuesday: Consumer Confidence

Wednesday: ADP Employment Report, ISM Manufacturing Index, FOMC Meeting Announcement

Thursday: Productivity and Costs

Friday: Employment Situation, Factory Orders, ISM Non-Manufacturing Index

Economic Data Under President Trump – Weekly Update for January 23, 2017

A new presidential era began last Friday with Donald Trump’s inauguration, and the market reaction was far more restrained than its response to his election. For weeks after the presidential election, we saw markets defy expectations and post significant gains. In fact, the Dow grew by over 1,500 points between November 8 and December 12.

In the four days of trading last week, major U.S. indexes continued the sideways performance we’ve seen since December. For the week, the S&P 500 was down 0.15%, the Dow lost 0.29%, and the NASDAQ gave back 0.34%. International stocks in the MSCI EAFE also declined by 0.48%.

Despite these weekly losses, Friday’s market performance marked one milestone not seen since John F. Kennedy’s election: index gains on inauguration day. Nonetheless, we still see a market that has been in a holding pattern for weeks. The S&P 500 has barely moved since the day before the Fed raised rates on December 14. If you analyze this graph of the Dow’s performance, you see a similar scenario – the index grew sharply after the election, but the red box shows performance stalling since December.

Why has the Trump Bump paused?

The markets are incredibly complex and multifaceted, so one answer cannot fully explain their performance. However, after rallying in anticipation of Trump’s promises for lower taxes, decreased regulation, and increased government spending, investors are now waiting to see which policies will come to fruition. No one knows for sure what policy changes or political developments lay ahead. We must look closely at fundamentals to see beyond the headlines and find a clearer view of where the U.S. economy stands today.

What are the fundamentals telling us?

During the current corporate earnings season, 63 companies have reported their fourth-quarter results so far. Of these companies, 63% beat earnings-per-share estimates and 46% exceeded their sales estimates.

Last week, we also saw:

This week, three factors will give us a deeper view of economic performance: 1) fourth-quarter GDP reports, 2) consumer sentiment data, and 3) home sales figures. By analyzing data rather than focusing on hype and predictions, we remain committed to your long-term financial health.

What should you focus on?

No matter your political perspectives, moments of change can elicit emotional reactions from even the most rational investors. As always, emotions have no place in investing.

Consider this: After President Obama’s election in 2008, the S&P 500 dropped 15.5% by inauguration day, as his transition period coincided with the deepening financial crisis. Investors who allowed emotions to take over at that point and left the markets could have missed the S&P 500’s 12% average annual growth each year Obama was in office.

We believe now is the time to continue focusing on your unique risk tolerance, your long-term goals, and the economic fundamentals, not who is in office.

We will continue to monitor economic and market evolution as it occurs, and we will closely watch the political division that seems to grip our country. In the meantime, we are here to answer any questions you may have and help you find the clarity you need.

ECONOMIC CALENDAR:

Tuesday: Existing Home Sales

Thursday: New Home Sales, International Trade in Goods

Friday: GDP, Durable Goods Orders, Consumer Sentiment

December Earnings & a Presidential Week – Weekly Update for January 17, 2017

2017-01-09 Blog ImageAs we look back on markets last week, we see mixed results with none of the major domestic indexes gaining or losing more than 1%. The S&P 500 was down 0.10% for the week, and the Dow gave back 0.39%, yet again failing to reach 20,000. On the other hand, the NASDAQ increased by 0.96% and reached its sixth record close in 2017 on Friday—pushed by a 1.36% rally for Facebook after Raymond James upgraded its stock. International stocks in the MSCI EAFE added 0.82%.

What We Saw Last Week

Big banks reported earnings. Earnings season is upon us. On Friday, we saw JPMorgan Chase, Bank of America, and PNC Financial beat profit expectations. These positive results add some weight to the post-election financials rally, where financial-sector equities in the S&P 500 have added 17% since the election. A number of other banks will report this week, and we will look to see if their performance also matches the growth we have seen so far.

Retail sales grew. The December monthly retail sales report showed a 0.6% increase, slightly below the 0.7% consensus expectations. With this growth, retail sales are now up 4.1% in the past year. However, not all retailers are performing well. General merchandise stores are suffering as consumers continue to shop online and move away from in-person retail stores. We see the results of this trend in declining retails sales numbers and large companies announcing store closures, including Macy’s, Sears, CVS, and many more.

Consumer sentiment was high but divided. The University of Michigan’s monthly report on consumer sentiment was 98.1, just below predictions but still near highs we have not seen since 2004. One interesting finding in the report is a strong partisan divide in consumer confidence. Richard Curtin, director of the consumer survey, described “extreme differences” between people’s expectations for whether new political policies would help or hurt the economy. He reminded people that the most impact on consumer sentiment will come from “actual changes in the economy” as a result of Trump’s work, which we will have to wait a few months to see.

What We’re Looking at in the Week Ahead

Earnings season continues. The markets will be watching earnings closely during this four-day trading week—specifically to see if other major financial institutions also beat expectations. Some analysts believe that to keep the current market rally going and demonstrate that there is weight behind the post-election growth, we’ll need to see excellent reports from most companies.

A number of high-profile companies report this week, including:

  • Morgan Stanley
  • Goldman Sachs
  • Citigroup
  • American Express
  • Netflix
  • IBM
  • UnitedHealth Group
  • General Electric Co.

Donald Trump becomes President. While earnings reports will be important to track, another event looms larger in many people’s minds: Donald Trump’s inauguration. After he takes the oath of office Friday morning and becomes President of the United States, we will begin to see how the market’s expectations for Trump’s policies match reality.

From trade to taxes to infrastructure and beyond, the next few months will give us a number of insights into how U.S. policies may change. Uncertainty remains, and we will watch for political developments that may affect the markets. In addition, we will continue to focus on the fundamentals that provide deep insight into how the economy is performing—and how we can strive to keep you on track toward your goals.

ECONOMIC CALENDAR:

Monday: U.S. Markets Closed in Observance of Martin Luther King, Jr. Day
Wednesday: Consumer Price Index, Industrial Production, Housing Market Index
Thursday: Housing Starts

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January 2017 Monthly Market Update Video

Happy New Year! We hope that you had a wonderful holiday season, and feel ready to take on the new year.

In this month’s video, we’ll discuss some of the major headlines that influenced markets in December — and provide insight in  to what these developments could mean for you as an investor.

If you have any questions or concerns after watching this video, send us an email, or give us a call at 419-425-2400. We would love to talk with you.

New Year Special Update: 2016 in Review – Weekly Update for January 3, 2017

2017-01-03-blog-imageFirst things first: Happy New Year! We’re thankful for all of you keeping up with us in 2016 and looking forward to what this next year holds. We appreciate your time and thoughts throughout the past year, and we are excited to work together to accomplish your financial goals in 2017.

Looking back on the final trading week of a very eventful year, we saw low volume and a break from the recent rallies for domestic indexes. While international stocks in the MSCI EAFE added 0.56%, all major U.S. indexes declined. The S&P 500 lost 1.10%, the Dow was down 0.86%, and the NASDAQ gave back 1.46%. For the first time since November 4, the indexes posted three straight days of losses. Despite these last-minute decreases, 2016 ended very differently than it began.

Last January, domestic indexes rang in the New Year with quite unpleasant performances. While the S&P 500 and NASDAQ dropped, the Dow experienced its worst-ever five-day start to a year, losing 1079 points on fears of an economic slowdown in China and plummeting oil prices.

By market close on December 30, 2016, all three indexes showed healthy growth for the year:

  • S&P 500: Up 9.5%
  • Dow: Up 13.4%
  • NASDAQ: Up 7.5%

In addition to this equity growth, last week showed us a number of encouraging economic indicators for 2016, including:

Consumer Confidence Surge: On December 27, Consumer Confidence beat expectations to reach 113.7 — a 13-year high. This metric indicates that consumers feel more positively about jobs, personal finances, business conditions, and more.

U.S. Dollar Increase: The dollar was up for the fourth straight year, showing a 3.7% increase for 2016 after hitting a 14-year high on December 20.

Crude Oil Recovery: After a rough start to the year, oil experienced its largest annual increase since 2009. In fact, three-dozen U.S. gas and oil producers in the S&P energy index gained more than 40% during 2016.

We all know that 2016 brought its fair share of surprises — from victories for Brexit and Donald Trump, to our recent stock market rally and beyond. However, the year ended with domestic indexes up and a number of positive economic indicators. As we look toward our future in 2017, we see opportunities for continued growth, as well as many questions that no one can yet answer.

  • Will President Trump reduce regulation and taxes?
  • Will OPEC keep its pledge to lower oil output?
  • How will China’s economy perform?
  • Could more “Brexits” be on the horizon?

The questions remain, but no matter the answers, we are here to help guide you through the year—and toward your goals—with proactive, strategic support. If you want to talk about what we experienced in 2016, or what we anticipate for the year ahead, we would love to get in touch with you. Please reach out to us at hello@hzcapital.com or give us a call at 419-425-2400.

ECONOMIC CALENDAR:

Monday: Markets Closed in Observance of New Year’s Day
Tuesday: PMI Manufacturing Index, ISM Manufacturing Index, Construction Spending
Wednesday: ADP Employment Report
Thursday: PMI Services Index, ISM Non-Manufacturing Index
Friday: Employment Situation, International Trade, Factory Orders

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17 Financial Resolutions for 2017

financial-resolutions-blog-imageAs the end of 2016 approaches, now is the time to start thinking about how you will make 2017 fulfilling and fruitful for you and your loved ones. For more than 4,000 years, many people have celebrated the start of their new year by making promises to change their behavior or improve themselves. And it’s no wonder why: While New Year’s resolutions can be hard to keep, they may also make you more than 10 times more likely to achieve your goals than if you hadn’t made a resolution at all!

So, no matter what you hope to accomplish next year and beyond, here are 17 financial resolutions to help make 2017 healthy, happy, and successful:

1. Create emergency savings

Life is full of unexpected emergencies, and having extra cash on hand can help keep a serious illness, home repair, or other sudden financial need from derailing your finances. Prepare for unpredictable expenses by putting aside six to eight months of expenses in an easily accessible cash-equivalent account.

2. Make a monthly budget and stick to it

Budgets may sound like a lot of unnecessary work, especially if you’re financially comfortable. But if you’re not tracking your spending, you may be surprised by how quickly it adds up — and which expenses are costing you the most. As 2017 begins, set a budget and work on sticking to it for three months. Track your performance and revise the budget, as needed. Don’t aim for perfection; instead, try for incremental improvement.

3. Save more for the future

Creating a disciplined savings strategy is an important way to stay on track for your retirement and other goals. We recommend keeping separate “buckets” of savings for short-, medium-, and long-term goals, and leveraging tax-advantaged accounts where possible. Let us know if you’d like help saving for specific goals so that we can help ensure you have the right strategy for your needs and timeline.

4. Make retirement plan contributions regularly instead of all at once

Even if you’re diligently saving, you may be among the 71% of Americans who haven’t put aside enough money for retirement. One key change you can make is to take advantage of time in the market. Instead of waiting until the last minute to make your annual contributions, give your money more time to grow by making automatic contributions to your accounts every month.

5. Maximize your retirement-plan contributions

Tax-managed retirement accounts are one of the most powerful ways to save for a more comfortable retirement, because they allow you to control your tax liabilities today — while accumulating assets for the future. Make the most of these accounts by contributing as much as you can each tax year. We usually recommend maxing out employer-sponsored plans first to take advantage of any matching contributions your employer may offer. Give us a call if you need help understanding your retirement account options.

6. Pay down high-interest debt

Did you know that 54% of Americans believe they will never pay off their debts? Don’t let high-interest debt keep you from getting ahead financially. If you’re carrying a significant amount of debt, make paying it down a top priority this year. Contact us, and we’ll help you create a strategy for managing your expenses and paying off your debt.

7. Set goals for the future and work with a professional to help you achieve them

From our experience, people who set goals for themselves and create strategies to pursue them are much more likely to see success. We’re here to help you and your family define exactly what you hope to accomplish in 2017 and beyond — and then build a strategy to achieve your objectives.

8. Create a powerful legacy for the world

We believe that a rich life involves more than financial success and a comfortable lifestyle. Whether you want to leave something to your loved ones or support causes you care about, take time to address the legacy you’d like to leave.

9. Review your estate planning and legal documents

Your core legal documents need regular reviews to ensure they keep up with any changes in your life. If a few years have passed since you looked at your documents, dust them off and make sure that they still represent your wishes. And if you seek more guidance on your estate plan, will, or other legal needs, we can connect you to thorough resources and helpful advice.

10. Review the beneficiaries of your financial accounts and insurance policies

As life changes, you need to periodically review and update your account beneficiaries. Since beneficiary provisions are independent of your will or other estate provisions, keeping them current is critical. Contact us for assistance with gathering account documents and making any needed updates.

11. Stay on top of your health

Healthcare is a major expense for most Americans, especially if serious illness strikes. Take steps to protect your wellbeing by building a healthy lifestyle and prioritizing preventive care.

12. Protect your credit and identity

Identity theft and financial fraud are serious threats that can compromise your financial wellbeing. Protect yourself by reviewing financial statements and bills carefully for unauthorized activity. Regularly update your passwords for all financial accounts and always shred any sensitive documents before you dispose of them. Check your credit report for free each year at www.annualcreditreport.com.

13. Review your tax strategies for potential savings

Every dollar you save in taxes is one that you can reinvest in your current lifestyle or future goals. But, recent tax-law updates mean that your tax burden may have changed — or even increased. Give us a call to discuss tax strategies that may help you reduce your tax liabilities.

14. Involve your children and grandchildren in your finances

Fostering financial wisdom is a powerful way to help your children and grandchildren build a solid, stable life — and help ensure you’re able to pass on your values and wealth in the future. Rather than keeping your finances private from your loved ones, we recommend including them in conversations about your goals and priorities. We also invite you to bring them to our next meeting. We’ll help them understand how we work together and what their roles and responsibilities may be in the future.

15. Schedule times to discuss finances with your spouse

If you (or your spouse) rarely get involved in the family finances, now is the time to start. Work together to make financial decisions and make sure that each of you understands the overall game plan for your finances. At minimum, make sure that your spouse knows how to access financial accounts and understands your wishes.

16. Identify your goals for 2017

Determine exactly what you hope to accomplish in 2017. Whether you want to earn more money, go on a wonderful vacation, or spend more time with your family, take a moment now to write down your goals. To increase the odds of achieving these goals, consider sharing them with a friend and providing regular updates on your progress.

17. Keep your financial resolutions

Just 8% of people keep their New Year’s resolutions — but by making your goals simple, specific, and actionable, you can increase your chances of being among this select group. Instead of saying: “I will save more for the future in 2017,” say: “I will contribute $4,500 to my retirement accounts by December 31, 2017,” or “I will pay off $2,000 of credit card debt by April 15.”

As 2016 draws to a close, we would like to once again thank you for the trust and confidence you’ve placed in our firm. We are sincerely grateful for the privilege and opportunity to serve you today and for years to come.

If you have questions about your future or would like some support in keeping your financial resolutions, we are here to help. Please call us any time at 419.425.2400. Together, let’s make 2017 a success!

Footnotes, disclosures, and sources:
These are the views of Hixon Zuercher Capital Management, and should not be construed as investment advice. Neither the named representative nor the Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.