Whether you mark time based on the calendar year, the fiscal year, or the school year, the final month is always a good time to assess how well you fared over the previous 12 months.
December, with its traditional break for the holidays when people take time off, attend holiday parties, and begin to consider which New Year’s resolutions to make, is an excellent time to create a financial checklist and assess where you are and – more importantly – where you want to go in the coming year. It’s not important whether you scratch it out with paper and pencil or go the digital route, but what is important is that you sit down for a few minutes and try to figure out where you stand financially.
So…before you let the holidays take over completely, consider these points as you make your year-end list.
- Stay on track – A budget can be the most important tool for a family’s financial health. It can tell you if you spent what you planned and saved what you hoped. If you made a budget, how well did you stay on it? If you didn’t make one, consider doing so for the upcoming year. A budget can help you keep your expenses in line with your income.
- Review your insurance policies – Life is full of uncertainty, so it makes sense to assess your insurance needs. Go through your life, homeowner’s/renter’s, car, and health insurance and determine if your insurance covers you adequately in the event one of life’s uncertainties happen. At the very least, going through your insurance coverage annually will give you a better sense of how much you’re paying for the coverage you’re receiving.
- Start by stopping – Next, take a look at your debt situation. Tackling your debt will take time and effort, but you can successfully dig your way out. The first step is to stop accumulating new debt. This alone won’t get you out of debt, but it will help you better manage the debts you have. There are also strategies that you can employ to pay down your debt, like the debt snowball method, which can allow you to make progress on the amount you owe.
- Get a jump on your tax return – Your personal tax year ends on December 31, so spend some time to organize your paperwork – receipts, bank statements, tax documents – and start preparing for your 2023 tax return. Any W-2s or 1099 forms will be mailed to you in January, but if you gather the paperwork that you can now, you may reduce your stress later.
- Consult a financial advisor – It’s always a good idea to consult a licensed tax professional or financial professional to answer any questions or provide advice on your personal financial situation.
If you’re not sure where to start, give us a call to request our end of the year financial checklist. You can reach us at (724) 719-3288