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New year busy for financial advisers
Pat Paxton, managing director of Investment Planning Directors, looks over a chart he uses to help clients understand how the stock market has changed over the years. - photo by Crystal Ledford

While many are focusing on getting their bodies into better shape in 2014, the start of a new year can also be a good time to get one’s fiscal health on track.

Local financial planners and advisers say January and February are two of their busiest months.

“It’s the one time of year that everyone looks at their finances,” said Steve Voshall, president of Financial Benefit Group Inc. on Allen Street in Cumming.

“People are recovering from Christmas and the holidays when everyone’s in stores and doing a lot more shopping — even for themselves — than they would normally and … it rolls over and all those credit cards come due in January.”

Voshall added that just as people hope to shed those holiday pounds, January and February are good months to think about getting into fiscal shape.  

“People need to have a New Year’s resolution on what they want to attempt to do with their finances,” Voshall said. “It’s very similar to dieting. You just have to come to the realization that you’re willing to commit to it.”

It’s also important, as with fitness, to not set unattainable goals.

“If you didn’t save anything last year, your goal can’t be to save $100,000 this year,” he said. “I have clients who say things like that and I’m like, you’re just setting yourself up for failure.”

Pat Paxton, managing director of Investment Planning Directors on Dahlonega Highway, agreed.

“It’s important to take baby steps,” he said. “Not everyone can afford to save 10 or 15 percent of their income. But if you can afford 7 or 8 percent, then do that.”

Like Voshall, Paxton said the first of a new year is always busy for him and his colleagues.

“It’s like a tidal wave of requests,” he said. “People are looking to review their status and their situation, and they’re looking to increase what they’re saving toward their financial goals.”

For those who don’t have much financial planning experience, Paxton said January is a good time to develop a budget, start sticking to it and working on paying off any debt. High-interest debts, like credit cards, are the most important place to start.

“One method we tell folks to help them keep their encouragement up is to pay off the card with the smallest balance first,” he said. “That way, they get the momentum, they feel good about what they’ve done, they’re able to check that off the list.

“Then they can take that money and apply it to the second card and then it snowballs.”

Paxton said the new year is also a good time to start working on building a contingency fund.

He advised that people should ultimately build up a savings of at least three to six months’ worth of living expenses so they can survive if they have a job loss.

Voshall said besides paying off debt and increasing savings, the new year is also a good time to evaluate retirement plans and any investments.

“The stock market is high, so it’s a very good time to look at all of your investments,” he said. “All of your year-end statements are coming in, so it’s a great time to look at all those to write down where you started, where you ended up [for the year]. It’s also an excellent time to look at your portfolio and rebalance that.”

According to Voshall, looking at one’s cash flow is also an important part of getting into good fiscal shape.

“I think pretty much everyone can sit down and say, ‘We have ‘x’ amount of dollars coming in every month and we have so much for our mortgage and other bills,’” he said. “But they don’t think about the variables in there and those variables are always what get them.”

For example, many of his clients aren’t aware they are spending a high percentage of their income on frivolous, seemingly small items.

“I had a couple who … were concerned about their cash flow,” he said. “When we sat down and went through their bank statements, they were spending twice what their mortgage payment was every month on ATM cash withdrawals for eating out. They were shocked.”

If people need a little help getting on financial track, Paxton said the start of a new year can be a good time to schedule an appointment with a financial adviser.

“It doesn’t hurt to explore,” he said. “Most, if not all, financial advisers offer free initial consultations so people can come in to inquire to see what we do and how we can help them out at no pressure to them.

“Most advisers know that people want to explore and go to different professionals to see how their personalities mesh, so there’s no pressure.”