How you can prepare your finances for the new year

You’ve probably set some self-improvement goals for the new year – but was improving your finances one of them?

There is something about the new year that encourages people to improve their life and set goals. A common goal for many of us is to eat less and exercise more. But are you also planning to spend less and save more?

Maybe your financial health isn’t quite where you’d like it to be after an expensive holiday season. Or perhaps you have some lofty goals for the coming year, like purchasing a home or getting married. Consider some of these tips to help get your finances on the right track this year.

Map out your goals for the new year.

Try to identify any of your goals for the coming year that are going to cost money. This could include things such as purchasing a home, new car, contributing more to a Roth IRA, paying off some credit card or student-loan debt, or taking your family on that dream vacation. Write these goals down and identify what they are projected to cost.

 Look at last year’s finances.

One way to do this is to pull out your bank or credit card statements from the previous year. Look at some of the financial mistakes you may have made over the year. You can identify ways to avoid the same or similar mistakes this year.

Image of an empty, snowy road with snow and pine trees lining both sides. Text overlaying the image says "Improving your finances for the new year."

Additionally, you can ask yourself questions such as: Has my credit score increased or decreased in the past 12 months? Am I in more debt or less debt than I was one year ago? At what point in the year were my finances the tightest? Questions such as these may help indicate what kind of financial year you had, and in what areas you might need to improve to have a better one this time around.

Try reducing fixed expenses.

Make a list of your fixed expenses from the previous year and consider ways you could reduce them (and maybe cut some out altogether). You could switch to a cheaper cable or cell-phone plan and look into a more cost-effective video-streaming service. When you add all of this up for the previous year, you might be amazed at how much these types of fixed expenses can cut into your finances every year.

Get organized.

Not only can automating your finances potentially save you some money by helping you avoid late fees and missed payments, but it can save you a lot of valuable time over the course of a year. Most financial institutions offer a variety of online and automated banking features. Visit your bank’s website and speak with your banker to make sure you are taking advantage of the automated and online banking features that work for your situation.

Give more.

Various research suggests there can be many benefits to charitable giving. In addition to the tax benefits you may be eligible for, charitable giving can help create a greater sense of happiness and satisfaction in your life. It can also lead to a better perspective on your own financial situation and help you develop a greater sense of appreciation for what you have.

These are just a few of many strategies and tips you can put into action to begin improving your finances for a new year. The important part is that you make it a priority, set some manageable goals and stick to them.

What are your financial goals for the new year?

 

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