Today marks the start of a new year, which is a good time to assess your finances and make sure everything’s in order. As the new year gets underway, here’s what you should consider:
Do you know where your money comes from? This is just as important as knowing where your money goes. You should know what sources of income you have, and how secure they are. Figure out whether you’re relying too much on one source of income. If so, consider ways you can add a little income diversity to your budget in the new year — from starting a side hustle to doing odd jobs.
Consider how you’re spending your money. Does it match your priorities? Think about what’s important to you, and cut out what isn’t.
You might be surprised at the amount of money you’re wasting each month. If you keep track of your expenses — even the little things — you’ll find ways to keep them from draining your wealth away.
Are your assets properly protected? Check through your insurance policies to make sure that you have the right amount of coverage. If your home has increased in value, you might need to increase your coverage. Check your car insurance to make sure that it makes sense for your situation. And don’t forget about your health insurance. If you have a high net worth, it might even make sense to purchase umbrella insurance.
It’s also a good time to think about your future and make sure you’re prepared for what’s next. This means evaluating the size of your emergency fund or saving for something special. You should also look at your retirement savings. Could you set more aside?
Don’t forget that debt can have a big influence on your future, as well. Now is a good time to review your debt situation, and make changes to begin paying it down. Any time you’re paying interest, you’re enriching someone else — and not using your resources to your best advantage.
The new year is a time to think about your finances, review your spending plan, and make changes that will result in a better financial situation in the long-term. If you take the time to do this, you’ll be well on your way to financial security.
Have you given yourself a financial check-up for the new year?