Believe it or not, it’s already time to make your New Year’s resolutions.
Reflecting on the previous year will allow you to make next year better — with everything from your diet to your finances.
Starting out the year with the best of intentions makes it easy to turn the page. Yet, for most people, that hope fades around March. By starting now, you can have your new goals set firmly in place so that when January rolls around, you’re already well ahead of your friends.
Why do we need resolutions?
The year has been crazy. You’ve let your financial statements get out of control, and you don’t know where you’re spending your dollars. You can’t make the same mistake as last year and spend more than you have as you head into the holidays.
This year, you can take it one step at a time, getting everything sorted so that when the end of the year finally arrives, you’ve improved your money habits. This will give you the confidence to know you’ve got the coming year covered.
Spend the month tracking your spending.
Use Mint, a spreadsheet of your own, or the software of your choice to track everything you spend during the month. At the end of the month, take a look at where you’ve needlessly spent money, and make it a point to find another solution immediately. Do this every month.
Bonus assignment this month: use one of the popular online calculators to help you calculate your retirement’s financial needs so you can start saving for them immediately. Meet those needs each pay period, starting now.
Organize your files, too.
You’ll need a couple of tools for this, starting with a paper shredder and some binders with folders or page protectors. Sort through your money paperwork, and move as much as you can online. For those things that can’t be moved, create a three ring binder (this might include retirement fund statements, insurance, stock paperwork, etc). Shred everything else.
If you’re really serious, invest in a digital filing system so that you can scan and file your paperwork once finished. Make it a point to handle the paperwork as as it arrives, rather than letting it lie around and consume space you don’t have.
Note: You’ll want to continue each month’s habit of recording your expenses and sorting paperwork as it arrives. Make sure you’re filing it in its proper place immediately to prevent the molehill from turning into a mountain. Don’t forget to set aside the necessary amount you need for retirement.
The end of the year is gift-giving time!
But, you have a plan. You want your finances to be in the best possible shape for the coming year, which means being smart through the biggest spending month. Give the gift of you. When you offer your time, you’re giving a special gift that can’t be bought in a store. This eases the burden on your wallet while strengthening the quality of your relationships.
Prepare attractive cards and trinkets at home, then attach a simple note that sends the message: “I’m thinking of you today, but I want to spend time with you tomorrow.” Recipients will love the simple gesture more than the scarf that you thought of getting them.
Follow through on each of these points, and in January, you’ll be smiling as the world around you scrambles to make the same resolutions that are already a part of your daily life. Now that you’re going, don’t stop. Continue to nurture your excellent habits throughout all of the following year.
How are you preparing financially for the new year?