A new year means another opportunity to take your finances to the next level. You can start the new year right by doing these things at the beginning of January.
Review last year’s progress. Track how close you came to achieving your goals from last year. If you met or even exceeded your goals, congratulations. If not, consider what you could have done differently to reach your goals. It may mean setting more realistic goals, leaving some flexibility for unexpected expenses, or simply being more diligent about accomplishing what you’ve planned.
Set your monthly and annual goals. At the beginning of each year, set big goals for what you want to accomplish over the next 12 months. You may want to pay off a significant portion of your debt, accumulate double the savings as last year, or work toward a raise. Break your big annual goal into smaller monthly goals so you can measure your progress throughout the year.
Project your income. Go into the year with a good idea of what you’ll bring in each pay period, each month, and the year in total. Having a good idea of your income helps you create a plan for spending your money throughout the year. You can easily see how much you can spend – or not spend – to accomplish your financial goals.
Audit your bills. Collect billing statements and review your credit cards and checking accounts for all the bills you’re paying. Make sure you’re paying for services you actually use and that you’re not being overcharged. The beginning of the year is a good time to ask for better rates. If you’ve managed your credit well and have a good credit score, ask your credit card issuer for lower interest rates. Check with your cell phone service provider to see if there’s a better plan.
Redo your budget. Take care of your budget at the beginning of the year and for the rest of the year, you only have to make small tweaks when your income or expenses change. Since you’re more motivated to improve your finances at the beginning of the year, creating a budget won’t seem like such a chore. Your budget from last year is a good start and if there aren’t big changes to your financial picture you won’t have to change your budget much.
Gather your tax documents. Tax season opens January 19th in 2016, but you don’t have to wait that long to get all your tax documents together. Start at the beginning of the year gathering your W-2s and 1099s as they come in the mail. Collect receipts and other tax documents all in one place so they’re easily accessible when you’re ready to file your taxes.
It’s not uncommon to lose motivation as the year passes. Getting a good running start at the beginning of the year puts you in a better place to reach your goals even if you lose steam toward the end of the year.