Financial Tips for 2020

By Nick Licouris, CDFA®
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It’s that time of year again! Holiday shopping and Black Friday are upon us. That means the new year is right around the corner. Financial resolutions are often one of the highest priorities on many people's lists of resolutions, the idea of “spend less, save more” promises that never seem to make it past the first few months. Here are a few easy steps to get your finances on track for 2020.

Emergency Fund & Making Your Savings Work Harder for You

I know the holiday deals seem too good to pass up but always have an emergency fund available when you need it for those unexpected expenses. It can really help you stay on track to meet your goals. Depending on your profession, you should always have anywhere from 3 to 6 months of emergency expenses in your bank account. This allows you to have access to cash immediately in case an unforeseen event occurs, and you will not have to tap into your investments. Once you have enough saved, it is important to get that excess money to work hard for you. You work hard for your money, it’s time for your money to work hard for you by not leaving it earning pennies in the bank. If you were to leave your excess money in the bank you will be losing out to inflation over time.

Paying off the Credit Cards Monthly:

While we all love to get our travel points, leaving a remaining balance that's getting dinged by outrageous interest rates these days (10-25%) is not a smart move. This will hinder you from saving and investing your money over time. If you find yourself over-spending each month, go back to your budget and see what you can cut back on. By letting your balance accrue interest you are hurting your chances of building your emergency fund and the ability to start to save for your financial goals. Make it your mission to fully pay off your credit cards every month.


Budgeting is one of the most important items to start your financial plan with, as it gives you a visual of the flow of your income. Monitoring your income and expenses can help you increase your net worth.

1. Begin by creating a realistic savings goal for each month. Ensure that this strategy will work for you.

2. With help from a financial planner, determine how much you will be expected to save in order to meet those goals (retirement, down payment for a house, college education, etc.).

I encourage putting away a minimum of 10% of your gross income into your investment accounts (including retirement and medium-term accounts.) Ideally, being able to save 20%-30% of your income is an excellent goal to have.

Look at Your Investment Accounts & Consolidation

The beginning of the year is a great time to look at your overall investments and ensure they are still aligned with your overall strategy to achieve your financial goals. This is a perfect time to work with a professional investment advisor to help determine your risk tolerance and run projections to make sure your still on track for your goals in life.

Americans are changing jobs more often than they have in the past, and this can result in multiple investment accounts and a headache to remember all of them. It is not uncommon for someone to have several 401(k) plan accounts with former employers. Once the number of accounts you have has been reduced, it may be easier to make changes, coordinate your overall asset allocation, and track performance.

Review Your Life Insurance Needs

The most important thing you can do is to make sure your family is fully protected in case a traumatic event occurs. This includes making sure you have the proper life, health, disability, and long-term care policies in place for protection. Even if you already have these plans set up, it’s important to review them with your advisor to make sure they still fit your current situation. The last thing you want to do is build up your assets over many years, only to see them deplete in a matter of days from an unforeseen accident. Working with a financial planner to calculate your exact insurance needs can ensure you have the appropriate plans and amounts of coverage to safeguard your family against a rainy day.

Being on top of your finances this year will allow you to have peace of mind that you’re on the right track to pursue your financial goals and financial freedom. It starts with a simple budget and holding yourself accountable. This is why it’s so important to have a financial planner on your team to be there every step of the way through your life. Let’s get 2020 off on the right start!

Securities offered through LPL Financial, Member FINRA ( ( Investment advice offered through Gerber Kawasaki Inc, a registered investment advisor. Gerber Kawasaki and Gerber Kawasaki Financial Advisors are separate entities from LPL Financial. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures the success or protects against loss.
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