REFLECT BACK TO POWER FORWARD

By Leida Speller

I am intentional about growth. I remind myself that nothing in the next moment requires me to be who I was in the last. If I am frustrated in the current moment, I can choose to step into being calm and collected in the next. While this takes self-awareness and cultivating mindfulness, we can leverage the lessons we bring to the present moment to power our way forward. We can be intentional about being better than we were even only a moment ago. We can apply this same mindset to transitioning into a new year. With 2021 behind us, we can reflect on that year for lessons that empower us to move boldly in, and have 2022 be our best year yet. Take some time to review who you were throughout 2021 in two key areas of wealth building. Decide how you will use the fresh start of a new year to up your game, reinvent yourself or improve your relationship with money. Let’s reflect back to power forward!

Strengthen Your Financial Position

How was 2021? Did your financial decisions positively impact your overall financial position? To answer this question, determine if your net worth has improved by totaling the value of all assets and subtracting the total of all outstanding debts. Examples of assets are checking and savings accounts, real estate, 401(k) or other retirement plans. Examples of outstanding debts would be credit card balances, mortgages, and student loans.

Assets – Liabilities = Net Worth (or Wealth) Our goal is to grow this in a positive direction over time.

How can you power forward?

You can power forward in 2022 by having a plan of action for increasing your assets and decreasing liabilities (debts). Start with a budget. Understand what you have coming in (net income) vs. what’s going out (expenses). Once you illuminate your cash flow, you can then determine the amount of cash surplus available to power into your goals of increasing assets (saving and investing) and/or eliminating debt. Put your cash surplus to work in a way that aligns with important factors like risk tolerance and investment objectives.

Manage Your Financial Risks

How was 2021? Did you move through 2021 feeling confident in your ability to respond to financial emergencies like a car or home repair? Could you withstand financial shocks like job loss or disability? How protected are your long-term wealth-building strategies like 401(k) contributions, against unexpected expenses or disruptions to your income? Life is masterful at throwing curveballs. Our best defense is preparation. Are you prepared?

How can you power forward?

Build a sufficient emergency reserve. How much you maintain in this reserve depends on your household income and expenses, but rule of thumb is 3-6 months expenses. Optimize employer-sponsored benefits as your risk management foundation. Benefits such as health insurance, disability and life insurance provide a great head start to building the protection our families need to thrive. Charge through 2022 with a fresh start to strengthening your financial position and managing financial risks. Don’t give up and keep climbing!