As another year comes to a close, it's a time to do a little dance because you're still here, and then to sit down and reflect on money matters. What did you do right, what did you do wrong, what could you have done better?
What happened in the world that impacted your wallet and what can you learn from that?
The experts weigh in on financial lessons of 2013 that should serve you well in 2014.
Stock markets can be surprising
With all the turmoil at the end of 2012, many personal finance voices would have guessed the stock market performance in 2013 would have been anything but exciting. "But the S&P 500 is up 30 percent year-to-date. Again, it's a great reminder of just how unpredictable the markets are," says Scott Halliwell, a certified financial planner with USAA.
Reacting to every twist and turn in the market is foolish. When it comes to investing, slow and steady wins the race.
"If you pulled your money out of the market early in the year because you thought that the market would surely go down, you are now in a more precarious position. You are probably even more nervous about going back into the market it is now at a much higher point/level than it was a year ago," says Tom Rauchegger, vice president of Cramer & Rauchegger, a firm specializing in retirement and estate planning.
Having a well-balanced, diversified portfolio and investment plan which includes both stock market and non-stock market correlated investments built on a strong foundation will protect and grow your money in both the short and long-term and in both volatile and bull markets, says Rauchegger.
Washington is unpredictable
This year brought the following news topics: the government almost shuts down, the government does shut down and the government nears a deal to avoid another shutdown. "Along with these events, millions of Americans became more concerned about their own personal finances," says Halliwell. "As if we needed more reasons to get our financial houses in order, those either directly working for the government or impacted in a second, or third-way, should be sure to manage their finances in such a way that they spend less than they earn and have money in the bank Nothing is for sure."
Axioms can fall
Many financial pros will tell you that it is safe to withdraw 4 percent of you retirement assets a year. The 4% rule was the subject of debate. "Michael Finke of Texas Tech University and Wade Pfau from The American College suggests that in low interest rate environments like that of today, retirees pulling out 4% from their portfolios could find themselves in trouble in later years," says Halliwell, who adds that in this climate, 3% may be better.
There are holes in your pocket
Even when the market goes up, you may feel less wealthy because of increased taxes. The average American family that makes over $110,000 per year saw their wealth decrease by $6,000 due to increased taxes and the elimination of the 2% payroll tax break, says Mary Kelly, PhD., author of Money Smart: How Not to Buy Cat Food When You Don't Have a Cat. "It is important to make sure that you are paying attention to spending."
Saving is not optional
"We had fires and floods throughout the U.S. and people were waiting on insurance claims. You have to have an emergency fund because you never know when you might need those three-six months of savings on hand as cash," says Kelly.
If mother nature doesn't get you, your employer might. The economy is still not a point where you can assume that your industry, your company is lay-off proof.
Saving for retirement should be a priority, not optional. "Social security is not enough to live on and this year the hot topic in the personal finance world was about people working longer and retiring later because of lack of funds," says Leslie Tayne, an attorney specializing in financial issues with the Tayne Law Group.
Set an annual savings goal and start with whatever you can. This can mean signing up for, or increasing your contribution to your employer's retirement plan, or setting up an IRA and having part of your paycheck sent to it. Says Linda Descano, president and CEO of Citi's Women & Co., which provides financial information for women, "Remember, just as you don't hit a fitness goal on day one, you don't hit a savings goal on the first day either."