Can you believe 2018 is almost over?! At the end of each year, it’s a good idea to take a look back at your finances. If you set goals at the beginning of the year, have you met them? Are you in a stable place financially? Or are there areas where you could improve? Take a look through this checklist to get a complete snapshot of your finances before the calendar flips.
One of the first areas of your finances you should look at is your debt. How much progress did you make with your debt this year? Or did you add to it rather than subtract from it? If you haven’t yet, go through and record how much you owe and to where (credit cards, student loans, etc.). Keep the list somewhere safe. At this time next year, you can compare where you are. If you didn’t make as much progress as you would have liked this year, why not? Do you have a debt repayment plan? Should you make adjustments to it? Checking in on your debt can help position you for a stronger repayment approach in the new year.
Checking in on your retirement at the end of the year is also wise. Most online platforms allow you to check your plans growth. Use this to look back at where you were at the beginning of the year. How has your money grown? Are you contributing as much as you can? Are you getting the maximum match from your company? Where do you want to be by the end of next year? Because retirement savings plans use compound interest, the more you save earlier on, the better off you’ll be down the line.
Another critical area to check in on is your emergency savings. Having 3-12 months of necessary living expenses saved up is ideal. This way, should the unexpected happen, you’ll be financially prepared. If you don’t have 3-12 months worth of expenses saved up, what adjustments do you need to make to start saving more? If you aren’t prioritizing contributing to your emergency savings, you may need to make changes elsewhere in your budget. Life happens, and getting caught without emergency savings can be incredibly detrimental.
How did your budget hold up this year? Did you even keep a monthly budget? If you haven’t been keeping a budget, now’s the time to start. If you have been, review whether it’s still working for you. Many people look at keeping a budget as a daunting task, mostly because it involves math. However, the math is simple addition and subtraction – what’s coming in versus what’s going out. And you don’t need a fancy software program or smartphone app to keep a budget. All you need is a pen and paper.
Thinking about estate planning can be difficult. Additionally, many people believe they are too young, or that estate planning is only for the wealthy. Neither of these is true. Estate planning is important because it ensures that your assets will be distributed the way you would like and to whom you would like. If you haven’t created a will, you may want to consider it. If you do have a will, the end of the year is an excellent time to review it to ensure it is still accurate and suited to your wishes.
Future Financial Goals
The last thing you should check off your list for the year is your list of future financial goals. If you came into this year with goals, check on your progress. Did you achieve any of your goals? Have you made as much progress as you’d hoped? After gauging how you’ve done on preexisting goals, think about what new goals you may want to set. Perhaps you’re looking to pay off your student loans, buy a house or go on a nice vacation. Once you’ve established a goal (or several), plan out the steps you’ll take to achieve it. Smaller, actionable objectives – such as paying off your highest interest credit card first – will help keep you motivated and allow you to build to those bigger goals. Writing your goals down can also be helpful. Putting pen to paper helps solidify your desire to accomplish it and can help hold you accountable.
The end of the year is a time when many of us reflect on the past 12 months. You can channel that sense of reflection to look back on your finances as well. What did you accomplish financially this year? What could you improve upon in the year ahead? Examining each facet of your financial situation as the year comes to a close will give you a complete snapshot of your money. You will also be better suited to make goals for the coming year. End this year – and start the next – feeling confident in your finances.
Being stared at by strangers is something I have become very accustomed to. Not because I am a beautiful, ethereal being that catches everyone's attention (but I will take it if that's what you're thinking), but in the way that I am a Black woman, a Black person, and people tend to notice my presence. I don't think there is a Black person out there that can deny knowing what it's like to be stared at by a random person.