Woman overlooks the city from board room

Financial wellness: why it is important to have your finances organized

Americans seem to have an obsession with organization. Maybe it’s due to the American tendency to continually improve, but there seems to be a cultural phenomenon around the importance of a clean and orderly life.

Just think about how good it feels to step back and look at a clean house. Now, imagine the difference an orderly approach can have on your finances. The truth is, it can be difficult to achieve your financial goals if you can’t see all of the pieces of your financial life. By taking time to organize, you give yourself the best chance for success.

Getting started

Organizing your financial life can be fun. If you’ve been contributing to a 401(k) or other investment account, seeing a complete picture of your assets may be a pleasant surprise. However, finances are also complex. It’s just as important to be mindful of the debt you owe as well as the investments you’ve made.

Taking an inventory of your accounts—both assets and liabilities—is the first step toward organizing your financial life. Identifying the accounts you own and how each impacts your overall financial health will tell you your net worth. Your net worth will vary over time, but knowing this number and whether you are trending positively or negatively will give you a clearer idea of your current financial position.

Creating your financial wellness plan

On your financial journey, it’s important to have an objective in mind. But without a plan to guide you, it will be more difficult to reach. Knowing where your money is, as well as how much you owe, helps create that plan, so you can envision opportunities to make changes that better support your goals.

Once you’ve created a list of your accounts and divided them between what you’re earning and what you owe, you’re on your way to creating the essentials of a financial plan.

Creating a financial plan is the surest way to know if the goals you have for your life are reasonable or not. You may wish to fulfill a dream of starting your own business, indulge a personal quest – like climbing Mount Everest, help support a child’s college or trade school education, or buy a vacation home. Or you may simply want to retire and live a quiet life while enjoying time with family. Either way, a financial assessment will help you identify a financial wellness void and give you cause to chart a financially secure course to help you realize these ambitions and dreams.   

Enlisting outside help

Though organizing your finances, developing your goals, and understanding your ability to reach them are the critical first steps, there are a number of other vital financial considerations to plan for as well, like how much money you need to live on beyond funding your goals; whether or not you’re properly protected with the right insurance; and if your savings for retirement are sufficient enough to sustain your intended lifestyle.

If you’re unsure of the answers to these questions, now may be the right time to talk to a financial professional and find out what steps you can take to improve your financial well-being.

Contact a Baker Tilly Wealth Management advisor today.

Baker Tilly Wealth Management, LLC (BTWM) is a registered investment advisor. BTWM does not provide tax or legal advice. BTWM is not an attorney. Estate planning can involve a complex web of tax rules and regulations. Consider consulting a tax or legal professional about your particular circumstances before implementing any tax or legal strategy. The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Securities, when offered, and transaction advisory services are offered through Baker Tilly Capital, LLC, Member FINRA and SIPC; Office of Supervisory Jurisdiction located at 4807 Innovate Ln., Madison, WI 53718; phone: +1 (800) 362 7301. Baker Tilly Wealth Management, LLC and Baker Tilly Capital, LLC are controlled by Baker Tilly US, LLP. Baker Tilly US, LLP, is an independently owned and managed member of Baker Tilly International. © 2023 Baker Tilly Wealth Management, LLC 

family business transition
Next up

Preventing conflict in family-owned businesses