Checklist: How Your Equity Awards May Help You Achieve Your Goals

Step 1:  Take stock, financially.

In addition to your income, assets, and debt, don’t forget to calculate the value of your equity awards including:

• Stock options and/or Restricted Stock Units (RSUs) you expect to receive or have vest this and next year.

• Stock purchases you have made in previous years and/or will make through an Employee Stock Purchase Plan (ESPP) through the end of next year.

• Stock options that will expire within the next two years.

Step 2: Refresh your spending budget.

Next, update your budget by using the popular “50-30-20 Rule” which allocates:

• 50% of your budget to needs, such as mortgage or rent payments, groceries, clothing, and other essentials;

• 30% to wants, such as entertainment, vacations, gadgets, or other extras; and

• 20% to saving, investing, and paying down debt.

Don’t forget to include estimated equity proceeds as part of your annual income.

Step 3: Document your goals.

Write down your life’s goals, and categorize them by how long you think they may take to achieve in light of your budget.  Evaluate how your equity awards may help you fund these goals:

Step 4: Create a goal-centered plan.

Now, turn your goals into reality:

• Shift your budget as needed.

• Allocate—and, if possible, automate through payroll deductions or online banking —funding for each of your goals in order of priority. If you sell some of your company shares, be sure to consult your tax advisor so you can plan for the tax impact.

• Check on your progress at least annually—more frequently for short-term goals.

Log into your account now to start planning.