From the Virginia Society of Certified Public Accountants - Presented by Dean Knepper, CPA, CFP®


(January 1, 2007) -- It's the time of year for popping champagne corks, tossing confetti and making New Year’s resolutions. And many of those resolutions are likely to focus on better financial management. The Virginia Society of CPAs offers the following suggestions to help you get your money matters in order.

Pay off holiday debt quickly

Try to wipe your credit slate clean. Add up how much you owe on each of your credit cards. Then create a plan for paying off your debt, starting with the credit card with the highest interest rate. In addition, call each of your credit card issuers and try to negotiate a lower rate. Going forward, resolve to make all purchases with cash or a debit card to ensure that you spend only the amount you have.

Save, save, save

Make saving a priority and pay yourself first. Don’t wait until all your bills are paid and you end up neglecting your savings. Most banks and investment companies have processes that enable money to be deposited directly from your paycheck or checking account into a savings or investment account.

Next, pick two or three spending categories — entertainment and clothing, for example — and try to trim 15 or 20 percent from the amount you typically spend. Divert this money to your savings account and you’ll be surprised how quickly your balance grows.

Review your insurance policies

You should review your homeowner's insurance at the start of each year to determine whether or not your policy amounts are keeping pace with the increased value of your home. Do the same with your life and disability insurance to ensure you have sufficient coverage.

Boost your retirement savings

When it comes to investing for retirement, it’s never too late, or too early, to start. For 2007, you can contribute up to $15,500 to your 401(k) plan at work — $21,000 if you’re age 50 or older. If you can’t afford to put that much aside, make every effort to contribute at least enough to qualify for the full company match. If you don’t have a retirement plan at work, consider opening an Individual Retirement Account (IRA), Roth IRA or Simplified Employee Pension (SEP) plan.

Check your asset allocation

Rebalancing is an essential part of managing a portfolio, and the beginning of the year is an opportune time to compare your current asset allocation to your target allocation. If any of your asset classes move off target by 5 to 10 percent, take steps to rebalance your portfolio.

Make a will

Start the new year by resolving to create a will — if you don’t already have one. A will ensures your personal belongings and assets will go to the beneficiaries you choose. If you have children, a will also allows you to appoint a guardian to care for them in the event of your death. Without a will, that decision may be left to the courts.

Make tax planning a year-round activity

While some tax-saving activities can be executed at year-end, others require time and planning. Examples include offsetting investment gains with losses, shifting income, restructuring your debt to take advantage of tax-favored borrowing and maximizing your itemized deductions.

Organize your financial records

Organizing your financial and family records can save you time, money and trouble. Sort through the paperwork you’ve been collecting and move important permanent records, such as birth certificates, wills, property deeds and trust agreements, to a secure fireproof location off your premises. Other records can be organized within a file cabinet or whatever system works for you. Just be sure that your family members know where all your important paperwork is stored.

Work with a CPA to create a financial plan

A comprehensive financial plan is a key tool for managing your finances. A written plan motivates you to achieve your financial goals, provides direction and offers a benchmark for measuring your progress. A CPA can help you establish or update your plan.


The Virginia Society of CPAs is the leading professional association dedicated to enhancing the success of all CPAs and their profession by communicating information and vision, promoting professionalism, and advocating members’ interests. Founded in 1909, the Society has nearly 8,000 members who work in public accounting, industry, government and education. This Money Management column and other financial news articles can be found in the Press Room on the VSCPA Web site at


Lifetime Financial Planning, Inc.

Dean Knepper, CPA, CERTIFIED FINANCIAL PLANNER™ professional

2325 Dulles Corner Boulevard, Suite 500, Herndon, Virginia, 20171

208 South King Street, Suite 201, Leesburg, Virginia, 20175

Phone: (703) 779-0515 - Fax: (703) 779-7815 - E-mail:

Hourly Fee Only | Financial Planning | Investment Advice | College Savings Plans | College Financial Aid |
Tax Planning & Prep | Planner Profile | Media - LFP in the News | Financial Advice Column |
Links to Financial Info | Meeting Questionnaire | Driving Directions | Contact Us | Home |

©2001-2003 Lifetime Financial Planning, LLC, ©2004-2007 Lifetime Financial Planning, Inc. All Rights Reserved