Take control of your finances before the new year starts. It’s okay that you didn’t get to save as much as you wanted. Let’s not focus on the past but prepare for the future.
Here are some tips you should review before the new year starts.
Evaluate financial goals – Do a year-in-review.
Ask yourself:
- What worked well this year?
- How much debt did you pay off?
- How much did you save and invest this year?
Take a moment to celebrate your wins! Whether big or small, every step forward is progress, and you’re doing a great job.
Write down your money goals- What do you want to accomplish financially in the upcoming year? Write it all down and be specific.
- How much do you want to save?
- What debt do you plan to pay off?
- Are there big expenses you must save up for, such as vacations, car repairs, or holiday gifts?
Having clear goals will give you a plan for the upcoming year.
Check your credit report – Your credit report is the key to your financial health. You can review all three credit reports for free at AnnualCreditReport.com. Look for errors, and if you spot any, dispute them. A clean credit report helps you qualify for better interest rates and financial opportunities.
Start or Build Emergency Fund – An emergency fund is your safety net for unexpected job loss or house or car repairs. Start small if you need to! Even $5 a week makes a difference. Work your way up to saving 3–6 months of living expenses.
Keep your emergency savings in a high-yield savings account such as Ally Bank or CapitalOne 360. You will get a better interest rate than a regular savings account. You can research High yield savings account at nerdwallet.com
Review your Budget/Spending plan – If you don’t have a budget, now’s the time to create one. Think of it as giving every dollar a job—it’s empowering!
Already have a budget? Great! Take a closer look:
- What’s working?
- What needs tweaking?
Budgets aren’t set in stone; they evolve as your life and goals change.
Know your numbers – Pull out your bank statements, credit card bills, and receipts. Do you see any patterns? Where’s your money going?
- Are there areas you can cut back?
- Are you spending on things that genuinely bring you joy?
Now’s the perfect time to reevaluate.
Check your subscriptions – Did you forget to cancel that free subscription, or didn’t notice a price change after the introductory rate?
Subscriptions can sneak up on you. Take a good look:
- Are you using everything you’re paying for?
- Can you cancel or pause what you’re not using?
Think streaming services, gym memberships, apps, magazines, and more. Those small charges add up quickly!
Retirement contributions – Review your contributions to see how much you contribute to your retirement accounts, such as a 401k or IRA. Increasing your contributions is a great way to lower your taxable income while building wealth.
Contact your HR department or financial advisor for help if you haven’t started.
Review Estate Plan- Estate planning isn’t just for the wealthy—it’s for everyone. Do you have these essentials in place?
- A will or living trust
- Beneficiary designations for accounts like your 401(k) or life insurance
- A durable power of attorney or healthcare directives
If not, connect with an estate planning attorney to protect your assets and loved ones.
Life insurance – Do you have enough life insurance to protect your loved ones? If you’re unsure, connecting with a life insurance agent is a good idea. They can walk you through the different types of policies—like term, whole, or universal life insurance—and help you decide what fits your needs and budget.
Beneficiaries – When was the last time you checked your beneficiaries? Review the primary and contingent beneficiaries on your life insurance, 401(k), and bank accounts for a few minutes. Life changes—like marriage, having kids, or a divorce—may mean it’s time for an update. Keeping this information current ensures your money goes exactly where you want it to.
Flexible Spending Account – If you have an FSA, use it before the deadline. It’s a “use it or lose it” situation, so gather your receipts and submit them before the year ends.
These tips will help you get ready for the new year.
Don’t stress yourself out about getting through the list. Pick 2 or 3 items to review every week until you are done. Focus forward and do it little by little, but do it so you can start a healthy financial journey in the new year.
What tip will you tackle first? Let me know down below.
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