Are you one of the many people looking to improve your finances in the new year? Whether you’ve created a financial plan in the past or are just creating one for the first time, the beginning of the year is a great time to review your financial situation. First, you have a whole year of financial data to look at. Second, you’ll already be pulling several financial documents to prepare your tax return over the next few months. And finally, a new year brings a fresh start.
Here are a few questions to help you reflect on the past year:
- Did your personal situation change? Did you get married or have kids?
- How did your income change this year? Did you start a business? Did you change jobs?
- How did your spending and savings compare to your plan? How does this compare to what you said is most important to you?
- Have your values or vision changed?
- When it comes to spending, are you too strict in some areas or too lax in others?
- Is it possible to sock away some extra money to meet a savings goal early?
- Did you implement the changes you said you were going to make?
- When it comes to saving for financial independence or retirement, can you contribute more to your 401(k) or
- Looking forward, what big things do you have on the horizon? How will this impact your financial plan?
- Are you buying a house this year? Are you planning a big vacation? Are you getting married or having a baby?
In addition to a big year-end review, it’s a good idea to check your progress throughout the year. A program like Mint.com is good for a quick weekly or monthly review. You should plan on performing a more in-depth review of your finances quarterly or twice a year.
And to help you stick with your goals, share them with someone who can hold you accountable. This is beneficial when it comes to your finances, as well as other areas in your life. For example, athletes have coaches and those looking to improve their fitness hire personal trainers. If you want to improve your spiritual life, you can meet with a spiritual director. Professionally, you might have a mentor. I recently joined a mastermind group to help me grow this business.
Is there anything holding you back from talking with a financial planner about setting your finances up for success?