At year’s end, many people think of parties as a means of celebrating accomplishments, blessings, and, hopefully, a healthy dose of good fortune.
There are other important issues, though, that are worth considering with respect to your finances.
Year-end is a good time to review your finances to identify what you need and what you might work on in the New Year.
You can still save money or pay off some debt, even if you’re making the same amount you did last year. There are always ways to cut spending, pay down debt, or save more money. It might require a serious analysis of money coming in and going out to see how these changes might affect your financial future.
1. Take a hard look at your budget
The amount you’re paying out is as important as how much you’re bringing in. If you see areas where you’re spending money frivolously, this closer look will show you where to make changes for the better.
2. See your money through a budget’s eyes
If you haven’t already, set up a budget to track your finances and see exactly where you’re money goes. This is not just about bills, either. Most of the damage comes from little things like cups of coffee before work or lunches out. You’ll be surprised at how much these conveniences are affecting your available funds.
3. Cut back on spending
When you’ve had a chance to review where you’re money’s going, you can consider how you might cut back on those little things that erode your savings. Even the smallest adjustments can mean a difference of hundreds or thousands of dollars over the course of the year.
4. Use the money you save wisely
You might be able to pad a savings account or pay down debt with the money you save. You can turn wasteful spending into fuel that drives you closer to your financial dreams.
5. Plan carefully for the New Year
If you’re in the habit of making New Year’s resolutions, make at least one of them related to your finances. Follow up with an action plan designed to bring results, and take action toward securing the better financial future you deserve.
It also helps to consider any issues you’re facing right now, while you’re planning. Are you due for a raise this year? Are there any special events coming up you need to plan for? Will there be a significant cut in overtime hours soon?
Consider all aspects of your life when you plan financially, as much as possible.
Your New Year’s financial plan might include considerations for:
- How much savings you have now and where you’d like to be next year
- Long-range goals like college, retirement, or a vacation home
- What your debts are now and how quickly you’d like to pay them off
- Ways to reduce your bills to more manageable levels
- What funds you have for unexpected expenses
- What expenses you could potentially cut your budget
This process may seem overwhelming at first, but when you break it down into manageable pieces, you can bring a long-term plan together that works for you and your family. You don’t have to do everything in one day. This plan is just a guideline – and you won’t need to implement all of it at once. There will also be opportunities to adjust your plan as your life changes.
Financial plans are valuable for many reasons, and sticking to them now can help you reach your goals in the future.
Be flexible, though, in your outlook, willing to adjust and re-think options as you need to. The adjustments you make over time will help your financial dreams become a reality.
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