financial checklist

New Years is an exciting time. It’s a moment filled with hope. We spend time with the people we love, realign ourselves, and refocus on what’s truly important in our lives. For some, this can inspire them to make some positive life changes in the coming year.

We’ve heard all the typical resolutions – exercise more, eat better, learn a language, pick up a hobby (just to name a few). But what about your finances?

Although setting financial resolutions may not be practical, starting your year with a financial checklist can help you get moving in the right direction. I’ve taken the liberty of designing this one. It’s fairly short – just five “to-do’s” long. Some things will be easy to knock out in a few minutes – while others might require some introspection.

#1: Setting a Budget

If you don’t already have a budget for yourself, the start of a new year is the perfect time to get started. I like to look at budgets as more than just dollars and cents – they’re a tool to help you reach your goals and find joy.

In my ebook, Happiness Spreadsheet, I talk about how mindful spending can help you achieve a more fulfilling life. A budget can help you set some guidelines in place that ensure you have the non-negotiables covered (like food and shelter), are working toward paying down debt or building savings, and still have something left over to spend intentionally.

#2: Setting Attainable Goals

Of course, you can’t have a budget without goals to guide it. Many people set big financial goals during this season, but I’m going to suggest you try something different. Instead of setting a goal that’s impossible to achieve – set a few, bite-sized ones instead.

If you start working toward a huge goal that’s impossible to reach, you’re setting yourself up for failure and disappointment. Having negative feelings tied to positive financial goals is never a good thing – and can often deter you from making progress.

For example, if you have a heavy debt load, you may not be able to become debt free this year. But you can work to pay off a large portion of it – and that’s something to be proud of! Set a handful of goals for yourself this year. Don’t be afraid to get creative! Money is a tool that can be used to amplify your happiness – set goals that reflect that.

#3: Organizing Taxes Before Filing Season’s Rush

Raise your hand if you’ve ever waited until the last minute to file your taxes. It’s not a great feeling. Instead, take the time to get yourself organized in the first few months of the new year so you can knock out your taxes early. You’ll get your tax refund sooner, and you’ll be able to check this often intimidating task off the to-do list. You don’t need to stress about getting them filed too early, though. Remember that your employer, banks, and other financial institutions have to get you the paperwork you need first.

#4: Review Retirement Plan Contributions

If you’re already contributing to a workplace retirement plan, that’s wonderful! The new year is a good time to check where you stand in comparison with your retirement savings goals and adjust your contributions as necessary.

You can also consider upping your retirement savings game by contacting a CFP® about additional savings options – like a Roth IRA.

#5: Create a Debt-Pay-Down Plan

Are you currently shouldering debt? Being in debt can make your financial life challenging. More importantly, it can have a negative emotional and psychological impact on you as an individual. Being in debt forces you to put off short and long-term goals, and it can damage your credit score. In short — the faster you can get your debt paid off, the better.

Although it might not be possible to pay it all off immediately, making a plan of action can help put you back in the driver’s seat of your financial life. Take this opportunity to assess your debt, and create an easy-to-implement strategy to make paying it off a priority.

A Focus on Finances For 2020

Whether you choose to tackle all of these tasks at once, or you want to take it one step at a time – find a pace that feels best for you. The most important thing is to continually make progress in the right direction.

Of course, if you ever need help or want to talk — reach out to me! I’d love to hear from you and help you work toward building a financial life that supports your dreams.