The start of a new year brings on the desire to check in with your health, eating habits, work habits… What about your financial habits? Here is a checklist of everything you need for starting the new year financially well!
Guys! It is 2019! What the heck! I feel like I just started working on 2018 goals a few weeks ago and here we are starting a completely new year. I thought I would share with you how we start out our year every year with a look at our finances in the big picture! While we do have monthly budget meetings (you can read about those here), having an annual financial summit like this has really helped us stay on the same page for our big picture goals (like our retirement savings, saving up for a house, and still planning a small vacation here or there!)
So today I have for you a checklist of things to add to your financial summit agenda – just about everything you need to audit in order to start your year out financially well! It is not a comprehensive list, since personal finance is so personal, but I think it is a great start.
Starting the New Year Financially Well
Take a look at your budget.
The best place to start a year out financially well is by checking in with your budget. I don’t mean having a regular old budget meeting – this might be more like a financial summit. I like to pull all of my budgets from the previous year (it is so crazy to think that I have over three years worth of budgets to look at) and see what our spending habits were!
I look for trends in things like where we continually went over our budget, places where we were spending money that we could be cutting back, and where our recurring monthly bills are trending so that I have an idea of how to budget for those things in the coming year.
It is also a good time to audit it and get rid of any services you aren’t using any more (like that pesky gym membership, Spotify music, or maybe changing banks to get rid of that pesky service fee you get hit with every month).
Write down all your annual expenses.
While you’ve got your budgets pulled out for the last year, take note of all of the expenses that you had that were not monthly – things that you pay out annually. Start making a list of all of those items so that you are ready for them this year and they are not a surprise! Bonus points if you decide to set up a sinking fund for those items so that your monthly budget doesn’t take that hit.
For instance – my husband goes on a big hunting trip with my dad every year that costs quite a bit of money. Even though we knew this ahead of time, I just decided to take it all out of that monthly budget which left me feeling pretty thin for the rest of the month. So this year we started a hunting fund for him that we will put money in each month that he can use in October!
Check back next week too! I’ll be sharing an Annual Expenses Printable next week that will walk you through this!
Check your automatic deductions from your paycheck.
It is a good idea once a year to assess your paycheck and make sure those automatic deductions from it are correct, still happening, and still should be happening. These types of things usually include your taxes and Social Security payments, health insurance fees, HSA (health savings account) funding, retirement contributions, gym memberships, savings contributions, etc.
Just go over them each in detail and make sure that the amounts look correct, checking with the appropriate people as needed to make any necessary changes.
Gather up tax information.
All tax forms should be out by January 31 so now is a great time to start putting together all of your tax information for the previous year! We itemize because we are on a housing allowance with our church, so we keep all of our receipts and information in one place, and I go through it each January to get it all ready for our accountant to process.
Plus, with the current government shutdown that is happening (as of January 2019), the IRS office is sparsely staffed so things are likely going to take longer than usual. Another benefit of getting this information taken care of early is that if you do end up owing money in, you’ve got time to save it up before the April 15th deadline hits.
Check on your emergency fund.
Take a good look at your expenses and your emergency fund and see if they are lining up. You should have 3-6 months of living expenses stashed away in your rainy day fund – in case of things like job loss or another major catastrophe like a health issue or emergency room visit.
If you need to add to your fund, make arrangements to do that as quickly as possible so that it is done, and you can move on with your life!
Give your financial adviser a call.
While I believe that you should be checking on your retirement accounts monthly, an annual audit with your financial adviser can help you stay on the right track for the rest of the year. Look at your rates of return, other investment opportunities to diversify into, and your overall portfolio to make sure you’re well on your way to meeting your financial goals for retirement.
Check your credit score!
Another item on the list that you should be checking more often than annually, but it is better than nothing! Look for incorrect items reported to your account that may need to be cleaned up.
Change your financial passwords.
While you should ideally change your passwords every six months, making sure to change them annually is better than having the same one for years! Sit down for fifteen minutes and change the passwords on all your financial accounts. Boom – you’re done!
Consider some changes to live more frugally.
We are coming full circle now, back to the budget! (You’ll notice that almost everything comes back to the budget!) Check out those expenses and see if there are some areas where you could be more frugal each month! Maybe you can save $25 each shopping trip (if you shop weekly, that adds up to $1,300/year) or cut the cable and opt for Netflix or Hulu (saving around $2,400/year) or cancel your gym membership and start working out at home (Saving $600-$1,200 a year!). This is not a requirement, but if you have some financial or lifestyle goals you’re wanting to meet, it is a great first step!
So are you feeling inspired to get your finances in order for the new year? What would you add to this list? If you loved this post, be sure to share it on Facebook & Pinterest!
