Harris: Are my financial goals still realistic? Reassessing and recalibrating

By Charlestien Harris

January is the start of a new year, and it may be time for you to rethink or set new goals for 2025! Life comes with unexpected twists and turns, and your financial goals may need to change with the new year. Determining your short-term and long-term goals can help you get on the right track to achieving success in reaching the goals you set. How far are you from buying a home, paying for your children’s education, and retiring comfortably? A financial counselor can help you assess your financial plan if your circumstances have changed. 

Some examples of changes that might warrant adjustments to your financial plan include a job change, a significant life event, or a change in how much risk you feel you can tolerate if you have made some investments. Here are some strategies to consider when reassessing your financial plan:

1. Review your old financial plan and make changes only if necessary. Only 19 percent stick with the goals they’ve set at the beginning of the year! Your old plan may have served you well last year, but the start of a new year can bring about sudden changes or unexpected consequences. Reviewing what you have done helps you make the necessary changes. It’s also important to review your goals regularly to ensure you’re making progress and staying on track. Setting measurable goals is crucial to track your progress or lack thereof. Not achieving a milestone may indicate that some type of change is necessary.
2. What tax strategies should I consider this year? This is one that many people do not consider. Did you know you can effectively control your finances through careful tax planning options? Over the years, I have prepared taxes for numerous people, and having to tell them they should have adjusted their W4 withholdings to reduce the amount of taxes they owed really shocked them. With tax season approaching, January is a great time to discuss tax-saving strategies with a qualified financial planner. You can also work with a financial counselor to identify applicable deductions and credits and how they might affect your financial situation. Learn all you can about the benefits of contributing to tax-advantaged accounts such as 401(k)s, IRAs, and 529 plans.
3. Are you saving enough for your retirement years? Retirement planning is a continuous process that requires regular adjustments and reviews. You should be able to assess whether your current savings rate is sufficient to fund your retirement. Early and consistent retirement planning provides security, helping to maintain your desired lifestyle, cover healthcare costs, and avoid financial strain, ensuring peace of mind in retirement. Having a well-planned retirement strategy can ensure that you maintain financial independence, adapt to income limits, and meet unexpected challenges like healthcare costs. If you are unsure how or where to get started, contact a certified financial planner (CFP), an accredited financial counselor (AFC), or a certified public accountant (CPA). All of these financial professionals can assist you with setting up different parts of your financial plan.
4. Take a look at your insurance policies. Life events happen all the time, and some of them will require you to review your insurance policies. Insurance is your financial plan’s safety net, and having the right insurance in the right amount protects you and your family from unforeseen events, providing a financial cushion. Insurance is an important financial tool. It can help you live life with fewer worries, knowing you’ll receive financial assistance after a disaster or accident, helping you recover faster. One important factor to note when it comes to insurance is to know whether you have actual cost or replacement value insurance. The two are very different! Actual cost assesses the actual cost of an item, then allows for depreciation to determine how much you will receive in compensation. Replacement cost allows you to replace the item at current cost, even if it costs more to replace the item in question.
5. What steps should I take to reduce debt? With the help of your financial counselor, you can establish an accelerated debt repayment strategy if you have significant debt. In addition to helping you prioritize high-interest debt, they can help you decide whether to consolidate loans or create a repayment plan tailored to your needs. Many of you tacked on extra debt during the Christmas holidays, and now it has come time to repay that debt. Developing a debt repayment strategy is key to getting back on track with your financial plan. Determine which debt repayment strategy works best for you and stick to it! Knowing how much debt you have accumulated is a great place to start. Then you can formulate a plan with your financial counselor to eliminate that debt as efficiently as possible without causing further financial strain.

Having financial goals is an excellent way to keep yourself on track with your spending. Just taking a look at the strategies listed above will help you start thinking about how to get back on track with your finances in this new year. If you find yourself having trouble knowing how or where to get started, you can contact a financial professional for help. Don’t be ashamed to ask for help. It is available, some at no cost and some for a nominal fee. 

For more information on this and other financial topics, you can email me at Charlestien.Harris@banksouthern.com or call me at 662-624-5776.

Until next week – stay financially fit!

Charlestien Harris is our financial contributor, a financial expert with Southern Bancorp Community Partners whose articles are seen in a number of publications around the region.