As 2016 comes to a close, now is a great time to review your finances from the past year. Examining your financial successes as well as your failures can help you be more successful in the upcoming year. Here is a guide to review your financial year.
Examining Your Financial Year: Successes & Mistakes
To review your financial year, you must take into account the good and the bad. Make sure you have your budget for the year ready and the details to all your various accounts. You should also have any financial goals you set available, like if you were getting rid of debt or building an emergency fund.
Identifying Financial Achievements & Failures
Can you identify where you succeeded or failed in your financial goals? Did you set any actually goals at the beginning of 2016? If yes, this will be a little easier for you.
Take a look at those financial goals. Compare your hopeful outcomes with the actual outcomes for the year. For example, if you set a savings goal of $2,000, can you locate those savings dollars? In my book, if you got within $100-200, I’d call that a win. The farther away you get from the savings goal, the less successful you were.
How about debt reduction goals? Maybe you had $5,000 in credit card debt at the beginning of the year, and the goal was to eliminate 75% of it. To be successful in this financial goal, you would have needed to get to $1,250 or under in debt.
Finally, let’s talk about budgeting goals. Did you set out to start budgeting, keep better track of spending or work with your spouse more on finances? There can be a wide range of goals you could have set. Honestly evaluate them when you review your financial year to decide if they were achievements or failures.
Raising the Bar for the Next Financial Year
Now that you know where you stand with your previous goals, it’s time to start writing SMART goals for 2017! Whether you had a lot of successes or mostly failures, you can always improve. If you crushed it, think about increasing savings goals, get out of debt completely and think about other goals you may want to incorporate, like saving for a down payment or retirement.
If you had some failures and some successes, think about if you aimed too high in some of your goals or if you made some poor choices. When setting new goals, make sure you run the numbers before committing to any aggressive debt elimination goals or avoid any spending sprees that aren’t in the budget.
Review your financial year at least once concerning your bigger financial goals. However, it’s best to regularly review your monthly budget and monitor debt regularly as well.
To speak to a credit counselor today about budgeting and managing your finances, call 800-769-3571.