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  • Bridget Sullivan Mermel CFP(R) CPA

Financial Resolutions for 2023: You Tell Me Yours, I'll Tell You Mine!



Financial Resolutions for 2023. Both John Scherer and Bridget Sullivan Mermel are making them! And we're revealing them in this video.


First, we discuss the first resolution that John recommends--the grandparent to all the other resolutions--resolve to spend some time on your long term finances in 2023. That means setting aside a specific amount of time each month or quarter to tackle some of the financial tasks that aren't that fun, but sure feel good when they're done.


We talk about what we DON'T recommend as a resolution that a lot of other advisors suggest--making a budget. Then we talk about what we recommend instead.


Bridget shares her recommendations for how to reward yourself for doing some of these tasks that, let's face it, might not be enjoyable to a lot of us.


What are your resolutions? We want to know! Go to our poll in our community section! https://www.youtube.com/@FriendsTalkFinancialPlanning/community


Most importantly, Happy New Year!! Thanks for watching! We appreciate you!

#acpmemberwisdom #financialplanning #goals


00:00 Welcome!

00:57 John talks resolutions

02:20 1st suggestion

06:45 2nd suggestion

08:49 Suggestion 3—Don’t…

10:40 We start our resolutions


John's firm website: https://www.trinfin.com


For advisors around the US: https://www.acplanners.org/home


Thanks for watching and please subscribe!


TRANSCRIPT:


John: As the new year approaches, many of us are thinking about our New Year's resolutions for next year. On today's episode of Friends Talk Financial Planning, we're going to talk about financial resolutions you might want to consider in the new year and maybe more importantly, a few that you would not want to consider. And stay tuned for the end when Bridget and I share some of our personal resolutions, so you can help keep us accountable in the next year for our goals. Hi, I'm John Scherer, and I run a fee-only financial planning practice in Middleton, Wisconsin.


Bridget: And I'm Bridget Sullivan Mermel, and I've got a fee-only financial planning practice in Chicago, Illinois. And John, before we talk about resolutions, let's ask people to subscribe. That helps us with YouTube algorithm and helps more people find us. Thank you to all of our subscribers, and if you're not a subscriber, please subscribe. John, you love resolutions, so let's talk about resolutions and what you have to say about it.


John: Yeah, I don't know if I love resolutions, but I get to this time of year, like a lot of us do, when you take inventory of what happened last year and it's that fresh start and thinking about what's going on for the next year. And of course, of course, like many of us, there're health resolutions, there're other things you think about. But on our show, of course, talking about financial planning, I thought it'd be useful to talk about some things that you don't read about in the common media, about saving more and spending less and all those sorts of things.


And one of the things that I think is a really good resolution or goal to have for next year is just simply to spend some time on your money, on your finances. And whatever that might mean for you. If you say, “Listen, I want to spend even an hour a quarter. I'm going to spend some time sitting an hour a month thinking about these things, because life goes on.” Financial planning, all your financial matters are important, but they are often not urgent. People often think, “Oh yeah, I should do this. Oh yeah, I should do that. I should get to those things.”


And if you don't set an intention goal about it, it often doesn't happen. So just simply saying, “I'm going to devote some time to thinking about my money,” really helps. One thing that I think is really useful for people is to put together a net worth statement. Corral all those little accounts and maybe old 401 KS or things and the bank and just see what you have and what you owe. Just as simple as that. It can take some time to do, but it can be really powerful and make you feel in control.


Bridget: Yeah, a lot of times people feel like they don't know what's going on. It leaves a lot of space for fears to come in and fill the gap. For instance, in our practice, we do people's net worth statements once a year and review them with our clients. And the stock market is down, inflation is up, so people have a lot of concerns. But then when they actually look at their net worth statement, a lot of times it's not as bad as they fear.


John: Yeah.


Bridget: So it helps to look at net worth. It's kind of a reality check. And this is one of those years where you're just kind of going along and you just kind of have to stick with it and keep with your plan. And so I don't know if many people are going to look at their net worth statement with a lot of anticipation, but it can be better than you think.


John: Yeah.


Bridget: I think that’s one of the positives of looking at your network statement. What's your next step?


John: I wanted to talk a little bit more about spending some time, so net worth is one piece, but I want to point out to folks that there is value in other things, like saying, “Hey, I want to review my insurance. How often do I look at that? And golly, maybe it makes sense because I haven't looked at it in a while. Or what about my wills? Are my beneficiaries up to date?”


Things that you and I do in practice for clients, those sorts of things like, “Oh, yeah, I should get my wills updated or take a look.” That reminds me of something I need to put on my resolutions here with some of our real estate holdings. I guess I'll be held accountable for that. But just doing something is key. The ‘what’ is maybe not as important as devoting time because life goes on and spending that time doing things like that can be really useful.


Bridget: Yeah. At least for me, I've got a list. And so, it's more a matter of, “What is going to happen on this list this year?” That’s a very passive way of putting it.


John: Yeah.


Bridget: It's going to happen. And it's more like saying, “What am I going to do on this list this year? What are my goals for the year?” I think that's what we're trying to get at.


John: Right.


Bridget: And so, you bring up some really good goals. First of all, just spending some time. That's good. And I am also a proponent of trying to make the time more enjoyable. Give yourself a small reward afterwards if that's something that'll help you do it, or just make it more enjoyable by saying, “All right, I'm going to think about my insurance, but I'm also going to listen to music I like at the same time.” I think people delay or put it off just because there's a resistance, because it's not as enjoyable as many other tasks.


John: Yeah. I just chuckled, thinking, “What could be more enjoyable than putting together a net worth statement or reading for insurance documents? That sounds fun to me.” But then again, that's what we do for a living, right?


Bridget: Right.


John: That's a great idea: putting something good with it. Let's face it, it's not a lot of fun digging through our insurance and corralling all these little pieces and parts. But the feeling when you get done, like any other goal, feels really good.


Bridget: Well, and I think that you get to a good point there, too. It might not feel that great when you do it, but there's a meaningful resonance after you're done looking at it, because you can look at it and put it in perspective. If you think about your whole life, saying, “This is my whole life. This is how much I've got now.


Wow, this is a lot more than I had before.” Or maybe less if you're in taking money out of your retirement fund and you can see the progression of your life. And so there can be more meaning in it than fun, but meaning is good too. Meaning contributes to happiness, and it gives you a more long-lasting feeling of resonance.


John: Yeah, that's great. So spending time right, whatever that means for you. We have already given a couple of ideas on just devoting some time to finances. One of the things that's really specific to the current year coming up is pay attention to your bank accounts. What do I mean by that? For the last 20 years, checking, savings, CD, have been paying approximately the same interest.


Today in this environment, we're seeing savings accounts, money market accounts, T bills, things like that, where on that safe money you're getting 2%, sometimes 3%, maybe even 4%. But that's not in all of the accounts. Checking accounts are still pretty low, for the most part under 1% or under 1.5%. So those differences five years ago, two years ago, whether the money was in checking account or savings account, was just about the same.

Now, however, it makes a difference. And spending some time paying attention to that in the coming year and asking, “How much are you actually earning on that money in the bank? How much do you specifically have in checking versus savings or money market? How does your bank compare to the bank down the road or the credit union or whatever,” can pay some real dividends in 2023. And it's something that folks should consider putting on their list of resolutions.


Bridget: Yeah. And I call this tidying. And you remind me that I need to check my accounts. I use one of those Internet banks, and they attract people with higher interest rates, but then they kind of change what the name of your account is and every so often I call them to make sure that I'm getting the higher interest rate. So my interest rate floats to a more profitable rate for the bank. Thus, I got to tidy up, I got to look at it and say, “Oh, okay, if I called this money market instead of a savings account, would I make more? Okay, let's move it over to that.” And what you're saying is that if you can get an extra percentage or two or maybe even three, it's totally worth it.


John: Yeah, that's right. So pay attention to those bank accounts in the new year. It could be a good resolution. The other one I just wanted to bring up was around the idea of budgeting and spending. That's one that we typically see or hear from folks about. And I'll tell you, this is sort of the one ‘don't tip’ that I have for folks. Don't make a budget and try to decide that you’re going to spend this much money in the coming year or in the coming months by saying, “Here's my budget for the week.”


That's just a challenging way to try to accomplish things. And instead, what I think people should consider doing is committing to tracking where they're spending, where their money goes: track your spending. And just by knowing where the money goes, it helps you to be mindful of it. Make it concrete and then once you have that concrete knowledge, it's kind of like you talked about Bridget when you said, “I don't feel so good about my net worth and things,” and then you look at it and half the time you go, “Oh, boy, that's a lot better than I feel about it.”


By knowing what you're spending instead of guessing at it, feelings will come up and you go, “Boy, I feel really good about that,” or “I don't feel so good, so I'm going to make some changes here and there.” But knowing about it is such a big deal. It takes some time, but we tell people, “Take your checking account statement and ask, ‘What went out the door there?’” And usually these days, there're not too many things. Mortgage and maybe some insurance and a couple of checks.


And then take your credit card statement and ask, “In January, how much did I spend?” And don't spend a lot of time worrying about whether it went to this category or that category, but just at the end of the month to see that you spent this much money, you spent $3,000, you spent $10,000, whatever it is, and go, “Okay, those are the dollars went out the door this month.” And then you can just ask, “Oh, jeez, how do I feel about that?” And just knowing what it is, making it tangible, I think would be a really great resolution.


Bridget: Yeah. And for me, that's one of my resolutions is to try to get a handle on my what am I spending. And not even to change it, but, honestly, I do want to be more mindful about it and try to spend a little bit more money on the things that give me more enjoyment and a little less on the things that are kind of wasteful. For instance, one of the things I aspire to do is give a little bit more money away. I can do that without suffering if I just spend a little bit less on some stuff that I don't need. What's coming to mind is there's a subscription that auto subscribed, and this is not cheap.


It's like $200 a year. I read this magazine for a while, but I don't read it much now, so I can resubscribe in the future if I want to, but it makes me think, “I’ll be motivated to take the time and effort to actually get the refund from them if I'm going to give the money away, because that's more than just going into my bank account.” I'd like to give more money away and spend less on stuff that I don't actually use. So that can be an extra hook, too. It's about asking, “What am I going to do with this knowledge?”


John: Yeah, that's great. I wanted to pull out one of the things that you said, Bridget: “I want to spend a little more on things that are important and spend a little less on things that aren't important.” And I think that's a really great point on this is it doesn't necessarily have to be, “I'm going to reach this concrete goal.” In some places, having those measurable goals is really important, but other things can be subjective, especially when it comes to your money.


Having more control over it, spending a little bit more on things that are important to you isn’t necessarily a measurable thing, but you know when you do it and if you're paying attention to it, that's a really great that can be a really powerful tool with things. And so, thanks for sharing one of your resolutions to do that. I think that kind of is a good segue into what things that we're looking at on things. What else do you have? Do you have anything else or is that your best?


Bridget: I need to revisit my wills. It's just something I recommend clients do every ten years. One of the reasons I've delayed doing it is because I think it's going to be more complicated than I want it to be at this point in my life. This is a tip for people: real estate prices have gone up, so because of that, there's more money around, meaning if you were to pass away, there's more money around than there used to be. So it's saying, “Oh, I got to think about that.”


John: Maybe you need to put on some nice music. Have a goal for yourself. After you address that, you can get a massage or something and make it a more enjoyable process, right?


Bridget: Exactly. Yeah, I might need to have more massages than one for this, because it can be a heavy topic. But again, it's not going to be a one-off plan; it's not like I can do it and forget it. No, I need to meet with a lawyer, and we need to find a lawyer. It's going to be a complicated process. How about you? Let's talk about yours.


John: Yeah, so one that just popped into my head while talking about estate planning is that we've got a couple of different pieces of property, and we had to change some of the titles a few years back, and I never circled back with our attorney to find out whether it should it be in a living trust. We had to make a change, and we never circled back.


It's been hanging out there. So that's on my list. I hope it's going to be just a one massage thing to get that done. I think it's straightforward, but I've been putting it off because it's no fun, so if you put it on the list, that's going to be useful, and I feel really good to have that done. It's one of those things not a lot of fun or enjoyment to do, but I'll feel good when it's done.


Bridget: They call it adulting these days😊


John: Yeah, that's right. It's totally true. The other thing revolves around some real estate too. We own our office building that we work out of—our office suite. We have to account for that in our taxes, and it's not that challenging, except for I don't do it during the year and then every spring I'm scrambling to try to figure out and put all the records together. And so just the idea of spending some time on it.


If I can keep up on those on a quarterly basis, then in the spring it should be really easy. And again, it’s one of those little things. Is it going to change the numbers? No, but I'm going to feel really good about having that in control. So for me, in both those cases, it’s about being in control and being intentional. Those are my two big ones for the New Year.


Bridget: Awesome. We'd love to hear what our viewers resolutions are. Feel free to put them in the chat. And with that, I'm Bridget Sullivan Mermel, and I've got a fee-only financial planning practice in Chicago.


John: And John Scherer. I've got a fee-only financial planning practice in Middleton, Wisconsin. Don't forget to hit that subscribe button. Help other people find this content on YouTube. And both Bridget and I are members of the Alliance of Comprehensive Planners. If you like what you hear on our show, check out acplanners.org.



At Sullivan Mermel, Inc., we are fee-only financial planners located in Chicago, Illinois serving clients in Chicago and throughout the nation. We meet both in-person in our Chicago office and virtually through video conferencing and secure file transfer.



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