As 2018 comes to a close, you may find yourself scrutinizing your bank account, or avoiding tracking your spending all together. Which ever side of the coin you fall on, the end of the year is a good time to focus on how to make the next 12 months, better than the last.
December and January are jam-packed with different opportunities to take control of your finances. And instead of setting unrealistic resolution, that according to U.S. News And World Report, will fail by mid-February –– the best a way to end the year, and start the next is strategizing a sustainable and realistic financial plan. Below are 5 of the best ways you can do that.
Review Financial Goals and Set New Ones
The end of the year is a hectic time, but it really pays to sit take a little time out of your busy schedule to sit down with your financial planner and discuss the year. Everyone has different financial expectations, but now is a great time to analyze mistakes you may have made and make the necessary adjustments so the new year will be more successful. It’s a great time for an emergency fund, increased 401(k) contribution, or finally buying life insurance. But, whatever your personal goals are, be sure to set realistic timeline to achieve them.
Focus on Debts
More than 44 million Americans collectively owe almost $1.5 Trillion in student loans, according to CNBC. That’s approximately 1 in every 4 American adult. So, if you have student loans, or other debts, make paying them off your number 1 priority.
There are two schools of thought behind paying off debt: Focus on the biggest loan which accrues the most interest; or pay of the smaller ones, get into a good habit and build on the smaller, emotional victory of achieving a goal you’ve set. Choose whichever strategy feels best for you, and start 2019 off with a strong focus on paying off your debts. By using automatic payments, and contributing a little extra, you’ll have a successful year and shed some serious debt.
Eliminate a Bad Spending Habit
One of the reasons it’s so important to look back on your financial year, is so you can pinpoint the mistakes you’ve made. One of the best, and most tangible ways to have a successful financial is to locate and then eliminate a bad habit. Did you take too many Uber rides? Eat out at too many restaurants? Too frequently spent full-price on new clothes? Target whatever issue you find, and make a plan to eradicate it. Enlisting the help of a family member or friend can be very helpful in this scenario. It can also be helpful to combine this goal with another. If you need to cut back on paying for take-out, and also want to contribute more towards retirement, then the money you don’t spend on Chinese food can go directly into your retirement account.
Spend the Money in the FSA Account
If you happen to be a salaried employee, there’s a good chance you also have an FSA account. And while, the Flexible Spending Account does allow you to spend pre-tax dollars on medical, dental and vision care, many times people forget to spend all of the money.
The first task, is double check your employer’s rules. Did they opt for the $500 rollover? If so, you can take $500 with you into 2019, but anything over that amount will disappear. There are grace periods and other rules that differ between companies, so find out, and use that money accordingly, before it’s too late!
Automate Good Spending Habits
Use this time of enthusiasm to solidify good financial behavior. Whether you want to contribute more to your retirement fund, or payoff a debt, whatever your financial goals may be, you can automate those monthly debits. Strike while the iron’s hot, and while you’re strategizing and feeling motivated. That way, you’re able to achieve your financial goals and next December, there will be less re-evaluating, and more celebrating financial freedom.
There are many ways to have a successful year financially. Find your strengths, and weaknesses, and create a plan to address both of them. Whether your goals are small or lofty, if you implement a sustainable plan now, it will be much easier to achieve your goals.
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