I work with a lot of people who are doing some of the right things when it comes to saving and managing their finances, but they have a lot going on. Maybe it’s kids, a growing career, multiple financial goals, or some combination of it all.

Of course everyone has specific concerns, pain points, and objectives when it comes to financial planning. But for just about every person I talk to, there is a need to simplify, optimize, and protect when it comes to their financial situation. Here’s how it works:

Simplify and Organize

If you’re 10+ years into your career, there is a good chance you have accumulated some financial clutter. Bank accounts that you don’t use, 401(k)’s from previous employers, a budget you created 5 years ago that’s no longer relevant. Consider taking steps to do the following:

• Close down bank accounts you no longer need.
• Decide what to do with old 401(k)’s.
• Get an understanding of how much you are spending – you don’t need to track your spending forever, but you need to be sure you have a sense of where your money is going.

Optimize

Once you have your day to day financial life simplified, you can focus on optimizing to make the most of your resources:

• Think about which financial goals are most important to you and your family – and revisit this often, things change!
• Decide if you are you saving enough to reach your goals.
• Invest appropriately for each goal’s time horizon.
• Be smart about taxes – not just filing your tax return and claiming the right deductions or credits. But investing and saving with future taxes in mind. Consider which types of accounts you should be contributing to based on your current and future income levels and the time horizon for each of your goals.

Protect

If you’re taking the steps above to optimize your finances, you also need to make sure you’re protecting the wealth that you’re building:

• Think about concentration risk – do you have a large amount of your savings in a single company’s stock? Equity compensation and company stock can be a great way to build wealth, but lacking sufficient diversification can be a quick way to lose a large portion of that wealth.
• Make sure you’re properly insured. Everyone knows it’s important to have auto and homeowner’s insurance, but do you have life and long-term disability insurance to protect your loved ones if you’re no longer able to provide for them?

Almost everyone needs to have an estate plan in place. Read this to learn more, and then get started on getting it done.

Focusing on these three areas can help you to make significant progress in your financial life. And if you need help thinking through any of these, please reach out to us.

Joe Calvetti is a CPA and the founder of Still River Financial Planning, a comprehensive, fee-only financial planning firm that specializes in working with young families and professionals. Click here to learn more about how we work with clients.

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Disclaimer: The information provided above is for educational purposes only and should not be considered financial, legal, or tax advice. You should consult with a professional for advice specific to your situation.