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2014 Financial Planning Calendar

Use this print-and-save calendar to tackle one financial task at a time

Christine Benz 31 December, 2013 | 7:30AM Holly Cook

Most of us have a running list of to-dos flitting through our heads, many of them financial. Update the will. Rebalance the portfolio. Make an ISA contribution for this year.

The first step towards accomplishing your many to-dos, financial or otherwise, is to block out the time to get them done one at a time. That's what this calendar is designed to help you do.


Create a personal balance sheet

Your year-end statements are probably starting to roll in and hopefully your portfolio doesn't have too many wounds that need licking.

Begin to take stock of your net worth by gathering up your most recent investment statements or going online to retrieve your current account balances.

Once you've documented your assets minus liabilities, consider the following questions:

1. Does any one financial asset consume a disproportionate share of your net worth?

2. Are your assets adequately insured?

3. If you're still working, do you have enough assets in place in your taxable accounts to cover your living expenses for six months or more?

4. If you're currently retired, do you have enough assets in highly liquid investments to cover two years' worth of expenses as well as any emergencies or home and car repairs?

5. How does your net worth compare with what it was at this time last year?

6. How does your current debt load compare with what it was a year ago?


Make last-minute ISA contributions

You have until April 5, 2014 to make a contribution to your ISA for the 2013/2014 tax year (earlier in some cases, depending on the particular product, so check with your ISA provider). If you have the cash on hand, you may want to set up your 2014/2015 ISA at the same time.

Check out Morningstar's ISA Centre for more on ISAs and what role they can play in your portfolio as ISA season gets underway. Don't forget about Junior ISAs too for the young savers in your life.


Revisit your assumptions

The start of a new year is an ideal time to take a close look at the assumptions you've made regarding your ability to reach your goals. In particular, you'll want to revisit your time horizon (your retirement date, for example), your savings rate, your asset allocation and your withdrawal rate. To help add some rigour to your analysis, turn to an online tool such as Morningstar's Asset Allocator tool.

Sign up to Morningstar's Portfolio Monitor Report to receve a PDF report by email each month that tells you exactly what your investments have been up to and how much you can reasonably expect to earn over the next 10, 20, 30 years.


Implement a budget

Did your analysis in January lead you to conclude that you need to save more and spend less in order to reach your investment goals? Join the club. With the economy still shaky, many individuals have rightly determined that the best way to get ahead is to do it the old-fashioned way: save more.

The first step is to analyse your current spending patterns. Track your expenses for a month or two on a spreadsheet or manually. Group your current monthly expenditures into two key categories: nondiscretionary (such as your mortgage, utilities and taxes) and discretionary (clothing, cappuccinos). Once you've done that, take a moment to review whether your spending squares with your priorities. Also, look hard at the discretionary bucket for items you can reduce or do without altogether. Armed with that information, create a monthly budget that includes an aggressive savings target.

Collect your tax information

As the tax year draws to a close, rather than waiting until the last minute--the deadline for submitting your annual tax review online is the following January--grab the bull by the horns and cross this item off your To-Do list as soon as possible. You'll thank yourself for getting them out of the way early, and if you don't do your own taxes, your accountant will thank you.


Put your investments on autopilot

Once you've created your budget, it's time to put your savings plan into action. Much as you invest in a pension plan at work, you can use your fund company or brokerage firm's "auto-invest" option to contribute to your taxable investment accounts or, preferably, your tax-efficient accounts such as ISAs on a monthly basis. Such a programme helps ensure that you're putting money to work in bad markets as well as good ones.

Build an emergency fund

A reduction in your income and expenses that are unanticipated--whether a car or home repair or a medical bill--are the easiest ways to derail your budget. The best way to keep that from happening is to make sure you have an emergency fund in place--three to six months' worth of basic living expenses held in highly liquid investments.


Tackle estate planning

If you don't have a will and an estate plan in place, it's time to address these items. And you should also be re-examining your estate plan about every five years to keep your plan in sync with tax-law changes and major life events.

Start by identifying a solicitor who specialises in estate-planning matters. Also, begin itemising your assets; if you created a personal balance sheet back in January, you're well on your way. What's considered a taxable estate is apt to change in the years ahead, but no matter your asset level, you still need an estate plan to spell out who you would like to care for your children should something happen to you, who you would trust to make healthcare and financial decisions on your behalf if you were unable to do so, who you want to serve as executor of your estate, and so on. After your solicitor has drawn up your estate plan, don't forget to take the next step and update your beneficiary designations.


Check up on insurance needs

More than half of financial success is finding a way to sidestep, or at least minimise, disasters. Putting in place an emergency fund, which you did back in May, is one way to do that. Another way is to make sure that you've purchased adequate insurance coverage, whether it be household insurance, life assurance or private heathcare. Our 30-day financial fitness plan can help you catch up on some of the basic insurance types that most individuals need in a day.


Get organised

Most people hang on to way more paperwork than they need to, particularly given that so much of this information is available online now. Start by making sure you have a good understanding of what to keep and what to toss. Keep: important documents like marriage and birth certificates (preferably in a safe-deposit box), as well as tax returns for the past seven years. I also like to hang on to receipts and documentation for big-ticket items. Toss: the many extraneous items that accompany your investment statements, such as marketing materials.

While you're getting organised, look into managing your accounts and receiving statements online. If you're not ready to go electronic, create a logical filing system for your paperwork. The key is to create a system that would be understandable to someone else. Also create a "cheat sheet" with all of your account numbers, passwords, contact people and phone numbers. Keep it in an ultrasafe place and make sure someone you trust knows where to find it.


Set up a system for tracking cost basis

Tracking your investment-cost basis isn't fun or simple, especially if you pound-cost average or reinvest your dividends and capital gains. But keeping good records of your purchases, sales, reinvested dividends and capital gains can give you greater control over your investment-related taxes. Some investors use spreadsheets to document their purchase prices and reinvested dividends and capital gains. Your brokerage firm or fund company may also provide this information on your statements or online; if they don't, you can call and ask for your purchase-price history along with any reinvested dividends or capital gains. Of course, if you've been taking advantage of the tax efficiencies of ISAs, you don't need to worry about income tax on dividends or interest, nor capital gains tax on your fund returns--you don't even need to declare ISAs to HMRC.


Make sure you're on track for retirement

If you're not yet retired, you should be maxing out your tax-sheltered investments by the time you're in your 40s. In 2014, you'll be able to invest a maximum of £11,880 within an ISA wrapper, either entirely in stocks and shares or with up to half in a cash ISA.


Check up on intermediate-term goals

Are you on track for retirement? If not, you can skip this step. That may sound harsh, but the reason is pretty straightforward. You can probably get a loan to pay for your child's university fees or your next redecoration, but no one will give you a loan to pay for your retirement.


Make one last check of your investments

The holidays are almost here and you've got a lot done. But before you go out and celebrate--or put your feet up to relax--you have a few more tasks to accomplish.

First, take a look at how your investments have done. If you've sold stocks or funds and realised a gain, pat yourself on the back. Then look through your portfolio for losing holdings that you can sell to offset those gains. Of course, avoid making hasty decisions. You don't want to sell a fund that you still believe offers potential and fits well in your portfolio: if it serves a purpose then its weakness could be an opportunity to pick up more shares in anticipation of a rebound.

Overachievers among you may also want to combine tax-loss selling with rebalancing, assuming your stock/bond mix is out of whack with your asset-allocation targets. Restoring your asset allocation so it's in line with your targets will help improve your portfolio's risk/reward profile. To minimise the tax effects of rebalancing, concentrate your rebalancing efforts in your tax-sheltered accounts. If your asset allocation is still off kilter, consider adding new assets to restore balance. If you must sell securities from your taxable account to restore balance, try to identify some losers to offset the winning holdings.

A version of this article was first published in January 2010.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author Christine Benz

Christine Benz  is director of personal finance at Morningstar and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances.