The Certified Financial Planner Board of Standards Has the Answer
Eleanor Blayney, CFP, Consumer Advocate, CFP Board of Standards
(Washington, D.C., Thursday, December 18, 2014) – “He’s making a list, and checking it twice. Gonna find out who’s naughty and nice.” We all know this classic Christmas hit, but this year, which list do you think you’d end up on based on how you’ve handled your finances? During this season of wish lists and Santa Claus’s famous lists, the Certified Financial Planner Board of Standards encourages us to determine if we’ve been financially naughty or nice this year.
It has put together “The Santa Claus Audit” to help us figure out if we got a little too naughty with our expenses, or kept our finances nice and orderly. If we do find ourselves on Santa’s naughty list, keep in mind that 2015 is right around the corner. It could be the year to achieve our financial goals, and with a little planning, we could end up on Santa’s nice list.
Are you on the NAUGHTY list?
- Your outstanding credit card balances have increased over the year;
- You dipped into your emergency reserves for a non-emergency expenditure;
- You have not requested nor reviewed your free annual credit report;
- Another year has gone by and you still have not prepared a will or estate planning documents; or
- You’re working, but do not contribute to your employer’s 401(k) plan. Add another lump of coal if you are not contributing to a 401(k) plan that has a match.
Or are you on the NICE list?
- You always shop with a list;
- You prepare a budget every year to govern your spending;
- You pay yourself first. For example, you automatically set aside a portion of your paycheck for short-term and long-term financial goals; or
- You know the following numbers by heart: your FICO credit score, your net worth, your marginal tax rate, and your monthly fixed expenses. For an extra candy cane, you know your asset allocation (percentage held in stocks, bonds, and cash).