Now that we are a full month into the new year, you’ve hopefully started doing some serious reflecting on your financial situation. Ideally you’ve already considered all of the lessons that were learned in 2017, as well as the areas you can reasonably improve on throughout 2018. While this self-evaluation process is by no means fun, it is extremely critical to move beyond simply creating a new year’s resolution to forming long-lasting and healthy financial habits. As was mentioned in Part 1 of this series, the end-goal should ultimately be to create S.M.A.R.T. financial goals that are: Specific; Measurable; Attainable; Realistic; and Time-sensitive.

Re-evaluating your INSURANCE NEEDS

Insurance coverage may very well be one of the least understood areas of our finances. Particularly when it comes to life coverage, people of color all too often tend to either be uninsured or underinsured by a scary amount. Moreover, the countless number of insurance products on the market can easily cause confusion for many, including some financial experts. Among the basic categories to consider when it comes to life insurance are Term; Whole Life; Universal Life; and Variable Universal Life. Each has its own distinct advantages and disadvantages but regardless of the product you choose there are some basic questions you must ask:

  • Are you confident that you and/or your family could survive a financial disaster today?
  • Have you accurately determined the amount of insurance coverage needed?
  • Are your primary and contingent beneficiaries fully updated on any existing policy(s)?

If you answered no to any of these questions then it’s in your best interest to meet with a trusted insurance professional for more guidance.

Updating your long-term INVESTMENT STRATEGY

While investment performance is something that should continuously be monitored, very few people actually make it a priority to do so. To add to this problem, many people are generally unaware of the most effective ways we can save for long term goals, such as retirement. In 2016, a study issued by (“The State of American Retirement”) found that the majority of black and hispanic families actually have no retirement savings account at all. Assuming you have already made it a point set up a own retirement account of your own, here are key questions to begin asking yourself:

  • Are you investing in the most tax-advantaged ways possible (i.e. 401k; IRA; Roth)?
  • Have you selected the best asset allocation based on your risk tolerance and timeframe?
  • How did your investment returns last year compare to overall market performance?

Starting a 529 Savings Plan for FUTURE EDUCATION COSTS

When you consider the average tuition for a four-year private institution is now over $34,700 per year, it’s easy to understand why so many people struggle with college debt. According to, over 44 million Americans currently have student loans with the average monthly payment being $351 for borrowers aged 20-30 years old. While there are no easy solutions for such an enormous cost, the one advantage we all have at some point is to start preparing early. One of the most efficient ways you can do so is to start a 529 savings plan for your child or family member. Generally, this strategy will allow you to save and invest funds with tax-free growth and eventually use those funds to pay for the cost of college. Many states, including Pennsylvania, even offer a tax break for contributing to a 529 plan. As you begin planning for your family’s future education costs here are some key questions to consider:

  • How much time do you reasonably have to save/invest funds for college?
  • How much responsibility will your child/family member bear in paying for their education?
  • Would other family members be willing to contribute even small amounts toward college savings?

While a 529 plan is certainly not the only solution for the high cost of college, it is fairly simple strategy you can use to at least get started.