I think you will agree with me when I say 2015 just flew past us in the blink of an eye. And before we know it, it will be yet another new year. Therefore, now is the time to take stock of your financial life and set your plans for the upcoming year. What will be your financial goals for 2016? Have you thought of setting/updating your budget? What is your biggest financial obstacle to conquer in the New Year? Is it getting over your debt or saving extra for retirement? Let’s look at a few tips to get you financially ready for the New Year.
Tips to Become Financially Ready for the New Year
Look back at 2015. The best place to start a new plan is by revisiting the previous plan. What are the things you did right? Where did you go wrong? Are there things that you could improve? Look at each component of your budget such as entertainment, food & shopping. Evaluate the significant cost elements from this year and see where you can make amends such as cutting back on cable & phone plans, refinancing your home or any other significant costs.
Build your 2016 budget. Evaluate all your income sources before you start building your budget. Look at your expenses in as much detail as possible. ACCC offers this Household Budgeting Worksheet to help you get a head start with your new budget. The worksheet will help you understand your expenses from the largest to the smallest costs and help you track if you are overspending in any categories. This is the most important step of your financial planning. Make sure you spend enough time figuring each and every expense.
Set clear financial goals. A financial goal helps you focus your finances on what is most crucial. Make sure that the goals you set are SMART. When you have a goal, you can operate under rules that you have set for yourself so there will be no difficulty in determining what you can afford to spend and what you need to save. To be financially ready, you have to know where you are headed.
Have a clear plan of attack. Once you have a budget, a financial goal, and a clear picture of your previous year’s finances, then it is time to determine your saving strategies. Saving for a goal worksheet is a great place to start.
A proper plan and a strategy is what you need to secure your finances for the New Year. And it’s best to start as early as possible to ensure that you achieve your 2016 financial goals.
Wishing you a happy holiday season!