When one year ends, suspiciously enough there’s another year just waiting around the corner. So if you weren’t pleased with how this year turned out, no worries! Here comes another year, with all the promise of a fresh start.
Of course, when you start a new year, you don’t exactly leave behind all the baggage of the year before. You can, however, clear away some of the financial clutter and make it easier for yourself to start over. Here are a few suggestions to get you started.
Perform a debt check
How’s your debt situation? A lot of people come out of the holiday season in rough financial shape, thanks to all that expensive holiday cheer. That doesn’t mean you’re doomed, or that the new year is ruined before it’s even arrived. It just means you need to be honest with yourself and create a plan.
So take a moment this month to consider where your debt stands. Is it comfortable? Does it feel a little dangerous? Are you looking for nice spots to bury your head in the ground so you don’t have to think about it? If your debt feels overwhelming, get help. Let a professional help you put together a plan. And if your debt just feels uncomfortable, consider making debt-reduction a top priority for the year ahead.
Review your savings status
If you’re already thinking about your debt, you may as well take a look at debt’s opposite number – your savings. Do you have an emergency savings? Do you feel like you’re in a position to cope with an unexpected setback?
The work starts next year (when all is fresh and new), but it’s helpful to look at your finances with a critical eye. It can help you determine your priorities and goals. Plus, it can be motivating to know where you are versus where you want to be.
Verify that all your accounts are current
In reviewing your debts, two considerations should always be “Are all these accounts current?” and “Will they stay that way?” The problem with debt is not simply that it can become unwieldy, it’s that it can balloon out past what your budget can handle. And once your expenses begin outpacing your income, you’re in real trouble.
So think about what you’re paying now and what you’ll be paying in the near future. Do you have the income to support those bills? Missing payments can cause massive damage to your credit and begin a spiral that’s difficult to escape. The sooner you see trouble brewing and the faster you act to get help or change your spending habits, the better off you’ll be.
Consider the money you feel you lost this year
Some money just feels wasted. For whatever reason, circumstances conspired to rob you of money you would have been better off using elsewhere. Think back on all the expenses you regret or feel bothered by. The point is not to feel bad about your choices, but to consider what might be done to avoid falling into a similar trap in the year ahead. By reviewing our mistakes, we learn, we improve, and – hopefully – we avoid making those mistakes again.
Hold your goals up against reality
Finally, think about what you wanted from the year that was. If you wrote down your goals for the year somewhere, dig them out and take a look. Where did you succeed and where did you miss the mark?
Again, there’s no value in berating yourself for the missed opportunities. Instead, try to think about why those goals didn’t pan out. Were you unmotivated? Were they really the right goals for you? Did you plan poorly? Did you plan at all?
Presuming you want to attack a new set of goals next year, it can be very helpful to examine why past goals have worked and why others have not. Once you’ve reviewed how the past year went, you’ll have a nice clean slate and plenty of perspective once the new year rolls around.