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I’m a Financial Planning Expert: 7 Easy Ways To Protect Your Wealth

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It’s arguably more important than ever to safeguard your wealth, especially given the current high interest rates. But with all the advice online, it can be tough to determine the best ways to do so. Sometimes, sticking to the basics is best. 

Taylor Kovar, CFP, who is the CEO of Kovar Wealth Management, recently shared some of the easiest ways people can protect their wealth in an email to GOBankingRates. 

1. Diversify Your Investments

The saying, “Don’t put all your eggs in one basket” exists for a reason. Kovar explained that an effective way to protect wealth usually comes down to leveraging a “combination of strategies” — diversification. 

“By spreading your assets across various sectors like stocks, bonds and real estate, you reduce the risk of significant losses if one sector underperforms,” Kovar said. 

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2. Get The Right Type & Amount Of Insurance 

Medical emergencies, car accidents and natural disasters are just a few unfortunate events that can cause your finances to spiral, potentially putting you in debt

Kovar stressed that “obtaining adequate insurance” is vital, including “health, life, and property coverage, to safeguard against unforeseen financial setbacks.”

3. Build An Emergency Fund 

Even with insurance coverage, you still need an emergency fund. Kovar noted that an emergency fund can “provide a crucial buffer in times of unexpected financial needs, preventing the need to withdraw from long-term investments prematurely.” 

Kovar recommended having enough money in an emergency fund to cover three to six months of expenses. 

4. Avoid Overspending This Holiday Season 

While it can be tempting to shop this holiday season, consider taking a step back before you hand over your credit card — and budgeting. 

“Budgeting for holiday expenses can help prevent overspending and accumulating debt, which is especially easy during festive times,” Kovar said. 

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5. Set Aside Time At The End Of The Year For Tax Planning 

Between parties and other festivities this holiday season, put aside some time before 2023 draws to a close for tax planning (we know, it’s not the most exciting thing in the world). The holiday season is a strategic time for tax planning, according to Kovar.

“Consider strategies like maximizing charitable donations or retirement contributions to potentially reduce your tax liability,” Kovar said. “These steps can help maintain your financial health as you enter the new year.” 

6. Get Financial Reviews Regularly 

With the hectic pace of daily life, it can be difficult to keep track of how you’re really doing financially over time. And even if you do your due diligence, you might miss some crucial details. Getting insights from an expert can be beneficial. 

“Regular financial reviews,” said Kovar, can “help you stay aligned with your long-term goals and adapt to changing circumstances.” 

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7. Stay Informed About The Economy 

The market of today is not the market of tomorrow. Kovar explained that “staying informed about economic trends and adjusting your financial plan accordingly is vital.” By keeping yourself up to date on the economy, you can act proactively with your finances, rather than reactively. 

“The financial landscape is constantly evolving, and what worked yesterday may not be effective tomorrow,” Kovar said. “Seeking professional advice can also be incredibly beneficial. A qualified financial advisor can offer personalized guidance and strategies tailored to your unique situation, helping you protect and grow your wealth effectively.” 

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