We are coming to the end of the year, and because we want this year to end on a positive note, we have put together this list of seven crucial moves involving your money that you need to make for the new year.
There is never a bad time to stop and take a look at your current finances, but if it’s not something you do regularly, there is no better time than at the end of the year. This is a good time to sit down, review all of your documents and numbers, look at your investments and savings plans, and get a fresh new look at where you currently stand financially.
We want the next year to start off with a bang, so we’ve outlined some moves for you to make in order to put yourself in position to prosper in the upcoming year.
1. Review Your Last 12 Months Of Spending
The first move that you need to make before the year-end is to pull all of your bank statements for review. You can either go to your bank and request these statements, or you could pull up your statements online.
Pull up the last 12 months of your statements and do a long hard review. We want you to look closely at your expenses; by doing this, you’re going to be able to see just where you are spending your money and where you need to make some adjustments. Sometimes, you will notice there are certain things that you are paying for that you may not be using; it just takes a simple phone call and you can cancel those services.
Also, by looking at your detailed statements and transactions, you can identify other areas in which you know you can cut back on spending. Reviewing your bank statements overall at the end of the year is a great step that will help you be able to get a grasp on your money in the new year.
2. Obtain A Recent Copy Of Your Credit Report
The next move you want to make is to take a look at your credit. To get a free credit report, all you need to do is go to annualcrediterport.com and you will have access to your credit report. It’s important that you take a look for a couple of reasons.
In this day and age, so many people are falling victim to identity theft. Without keeping up with your credit report, people can be opening up credit cards in your name, taking out hospital bills in your name, etc., so it’s good to take a look at the end of the year because you need to make sure that everything that is on your credit file is accurate.
If you pull your report and find that there are things that are inaccurate, now at least you know what needs to be fixed and you can do what you need to do in order to rectify the situation.
In addition to your credit report, you want to take a look at your credit score. Another great resource to obtain your score is at creditsesame.com. This is a great tool because it’s free, and while it does not provide your FICO score, it does give you a general ballpark figure of what your actual FICO score is; so this helps you to know where you stand. Again, this information helps you to decide any necessary adjustments that you may need to make. Are you where you need to be with your credit score? Are there some improvements that you can make? This is a great time to take a review of all of those things.
3. Take A Look At Your Debt Balances
The third move you are going to want to make is to pull all of your debt statements. These documents include credit cards, car loans or mortgage loans, student loans, etc. After you review your credit report and you see to whom all you owe, you need to call these places or visit them online, and reach them directly so you can pull up those detailed statements.
We want you to review the balances as well as look at the interest rates. You need to know what you owe and how it is broken down. It is crucial to assess this information, especially close to the beginning of the year because hopefully, your next year’s goal is getting out of debt.
How can you get out of debt if you don’t even know where you stand? So we want you to pull those debt statements, really look into the balances and interest rates, and start to knock out that debt and begin working toward your goals in the new year.
4. Establish New Short-term Goals
While we are encouraging you to take these steps now that the new year is approaching, we also want to say that you don’t have to wait until next year to make these goals. Why not do that now? Why not go into the next year with your goals for the new year already talked about and already established?
We are big fans of financial goals in general, but we are even bigger fans of setting goals ahead of time so that you can prepare yourself. You want to be mentally prepared and ready in every way to walk out the goals that you have set for yourself. Don’t think that January 1st is the only time to start defining and working toward these goals. Why not do it now? Why not give yourself a head start on having the best next year that you possibly can?
Just to kind of give you an idea on what type of money goals that you should be setting, think of some of the things that you want to do next year when it comes to your money. Some of you may want to get out of debt, and if so, how do you want to do that? You may decide to save an extra $500 per month to throw toward your debt.
You may also have savings goals; some of you may want to beef up your emergency funds. Some of you may want to go on a family trip or vacation, and this is going to cost money. For things like that, you need to be setting up some type of sinking fund to throw money into so that when that day comes, you’ll be able to pay for that vacation in cash.
So you definitely want to sit down and just take a hard look at some of the things that you want to achieve next year that are going to cost some money. It is going to involve either saving money or spending money, and you want to make those goals.
5. Assess All Of Your Investments
The fifth move that you want to do is access all of your investments. These include things such as 529 Plans or college savings accounts for your children, 401(k) or 403(b) accounts, or even Traditional or Roth IRAs. There are some tax advantages to making sure that you max these out by the end of the year. You will have a little grace period with some of the investments that will go over into the following year before your tax deadline, but you definitely want to sit down and look at your accounts and see if maybe you can bump those up a little bit. This is going to help you save some money when it comes to doing your taxes.
This is also an important time to check all of your beneficiaries on your accounts. Some of you may have gone through some major life changes throughout this past year, may be either a marriage or a divorce, or a birth. You definitely want to look at your statements and see who you have listed as your beneficiaries. Some of you may not have beneficiaries listed at all. Make sure that you are okay with whoever you have listed on there. If you need to make any changes, take the time to make your records accurate.
6. Determine Your Contributions To Charitable Donations
Another thing to remember now that the year is coming to an end is thinking about donating to charities. Not only does this make you feel good, but it’s a great tax strategy to make the best of your money. Are there some causes that you really believe in? Are there some reputable organizations that you really want to get behind?
This is the time to go ahead and send some funds their way because that lowers your taxable income. You want to get those donations in before the year closes out. That way when tax time comes, you’ve made all your donations within the allotted time for the tax year.
7. Make Sure You Have Sufficient Life Insurance
The seventh year-end money move that you want to make is all about your life insurance. Do you not have any life insurance at all? Do you not have enough? Is your policy set up correctly? This is the perfect time to take a good look because the truth is that tomorrow is not promised. When it’s all said and done, we all should want to create a financial legacy for our family.
We don’t ever want to be a burden to our family. A big part of that is making the right moves when it comes to life insurance. A great resource to help you figure out where you are with your life insurance and if you need to make some adjustments is our go-to company, Policy Genius. We love this company, they are good people and they are here to help you. Visit their site and you can get a free assessment to see how much your life insurance should be, and you can also compare your current levels of insurance to other levels that you may need to be at with your coverage.
