by Jennifer Leighton

I love the holidays. I love seeing family and friends.  I love the (hopefully) cooler temperatures.  I love the twinkling lights and decorations.  But what I love the most about the holidays is the built-in excuse they provide for indulging in highly-caloric foods and overspending at the mall.

What I don’t love about the holidays is the post-New Year’s “hangover.” I’m fairly certain many of us will wake up feeling bloated and broke on January 1st – hence the tradition of the New Year’s resolution.  “In 2017, I will…go to the gym…eat vegetables and quinoa every day…spend less and save more…”  Most of us are fairly good at beginning our resolutions – have you noticed how most gyms are packed the first few weeks of the year?  But keeping them up?  Not so much.  And without someone – or something – to hold us accountable, very few of us see our resolutions through to the following January.

While I can’t help you reach your fitness goals in 2017 (I’ll leave that to the personal trainers out there), I can offer you a valuable piece of advice when it comes to your finances: Make 2017 the year of your financial plan.

What is a financial plan?  A financial plan is a detailed analysis of your current and future financial situation.  Your plan should include a personal net worth statement, which illustrates your assets and liabilities, and a cash flow analysis, which shows your money coming in and going out.  In addition, your financial plan should be tailored to you and your individual goals.  What are the financial milestones important to you?  Buying a new home?  Paying for your child’s college tuition?  Retiring before you’re too old to enjoy it?  Those future aspirations need to be a part of your plan as well.

Your plan will also serve as a basis for your long-term investment strategy. Asset allocation, risk tolerance, and investment objectives are all determined by financial planning, as are strategies to reduce your tax liability.  Think of your plan as a roadmap to your future financial well-being.

Who needs a financial plan?  It’s a common misconception that only the ultra-wealthy need a trust.  However, almost everyone can benefit from proper estate planning.  And the same holds true for financial planning.  In fact, no matter what money issue you’re having, a plan can help.

One of the benefits of articulating your goals in a plan is the ability to see the current mistakes you may be making which could derail them. You’ll be better equipped to track your financial progress which, in turn, will boost your confidence with your money.  While the idea of creating a financial plan may seem a bit intimidating – or even downright frightening – a well-done plan can give you great peace of mind.  And the sooner you get started, the better off you will be.

How often should you update your financial plan?  Too many people – and, unfortunately, some financial planners included – think that once your plan is completed, you’re finished with the process.  Not even close.  While studying Constitutional Law in law school, I learned that the United States Constitution is what’s known as a “living document” – meaning that its interpretation may shift over time as changes occur.  In a similar way, your financial plan is a “living document.”

We can’t plan for everything in life. Changes in careers and marital status happen.  So does illness and the loss of loved ones.  As you experience transition – both the good and the bad – your plan needs to transition, too.  It’s imperative your financial advisor update your financial plan as life changes occur, as well as conduct regular reviews when things are sailing along smoothly.

So enjoy your holidays. Eat, drink, and be merry…for tomorrow we plan.

This article originally appeared in Westlake Malibu Lifestyle Magazine.

MFI Staff-JennJennifer C. Leighton, JD, Certified Divorce Financial Analyst™ is a Senior Analyst at Manchester Financial, an Investment Counsel/Wealth Management firm located in Westlake Village. She specializes in helping divorcing and divorced individuals achieve financial peace of mind and she is passionate about educating and empowering women to take control of their financial lives.  Jennifer is a published book author and her article, “7 Financial Tips for Women Facing Divorce,” was recently published on The Huffington Post. For more information call 800-492-1107.

This material is provided for general and educational purposes only, and is not legal, tax or investment advice. For each strategy or option mentioned, there are detailed tax rules that must be followed.