Cooler weather and falling leaves mean the year is drawing to a close. Just before the holidays is a good time to give your finances a thorough inspection since it’s your last chance to make financial moves to help finish this year strong. Now is the time to adjust so you can get ahead on next year’s savings or debt reduction goals.
First Inspect Your Current Strategy
Your first financial task should be to set up or tweak your budget to properly monitor expenses. Allocate funds efficiently so you’re on track to achieve financial goals. Some costs have probably changed, you may have received a raise, or a life event could have added a new expense since the last time you adjusted your budget. If there’s extra money from somewhere, decide which financial priorities need a little more attention. If funds are tight, take a hard look at entertainment and other discretionary expenses that can be reduced.
As long as you’re modifying or creating a new budget, build in some pre-holiday money saving. This is an easy way to protect yourself from overspending that is common this time of year. Putting a little aside every week from now through the start of the holidays can go a long way toward preventing family activities and gift giving from breaking the bank. Then, as the New Year approaches, you’ll already be in the habit of saving extra that can go towards getting rid of debt or starting an emergency fund.
Pull Your Credit Report
If you haven’t done so recently, it’s wise to check your credit report before the year ends. Each of the three major credit reporting agencies will provide you with one free report per year. You can access these at www.AnnualCreditReport.com. Spread out pulling your three free reports evenly throughout the year so you can consistently monitor for fraudulent accounts or reporting errors that can hurt your credit score.
There are many financial moves you can make once you have your credit report. Use it as an inventory of active accounts to ensure you’re current with all payments towards credit cards or loans. Quickly double check that all credit card charges are legitimate. Identity thieves will sometimes make only small charges in order to avoid detection.
While checking on your accounts, note the interest rates for all credit accounts with an outstanding balance. Make sure that you are paying more toward the accounts charging the highest interest. This will reduce borrowing costs long term and help with credit card debt elimination. If you’re financially stable, you may consider setting up automatic payments, but be careful! This is an easy way to accidentally overdraw your bank account and incur penalty fees.
Final Financial Moves
Finally, as long as you’re gathering all of your statements and receipts for helping manage your budget and credit accounts, take the time to organize all of the important financial paperwork that has collected during the year. Tax season has a way of creeping up quickly after the start of the year. Any preparation you can do beforehand will reduce stress as April approaches.
Thoroughly assessing your finances a couple times each year is the best way to make sure you’re being smart with your money. It helps with debt management, lets you remain focused on financial goals, and protects you from ID theft. The fall is a great time to perform a checkup, so make some time now before the holidays arrive and overload your to-do list!