You probably don’t need a reminder but just for the heck of it, here’s one anyway: the end of the year is just weeks away.
And not just any year. It’s the last year of this decade, which means a lot of us will be reflecting on where we’ve been and where we’d like to go before moving into a new decade.
If you’re thinking about where you’ll be at financially as we head into 2020, you’re not alone. A 2018 poll conducted by the American Psychological Association found that two-thirds of adults were extremely or somewhat worried about paying their bills or expenses. In addition, only 19% of Americans were less anxious about money than they were the previous year, while 39% were more worried.
Improving your financial situation is always important. Along with that, it’s helpful to keep up regular habits like saving, budgeting, and staying on top of your bank account balance. Still, there’s nothing like a new year to help you gain even more perspective.
Here are 5 must-dos to put on your financial checklist before the end of the year. This will hopefully get you one step closer to financial security.
1. Review Your Financial Goals
Like most of us, you probably set quite a few financial goals for yourself at the beginning of the year. Then life happens, and you find yourself forgetting about them no sooner than when you take down all of your holiday decorations.
Now is the time to re-evaluate those goals and figure out whether you achieved them or not. If you did, give yourself a high-five for that awesome self-discipline! If not, don’t get too down on yourself. Instead of feeling like a failure, give yourself credit for being brave enough to set a goal in the first place.
Think about what your goal was, why it wasn’t accomplished, and what changes you can make to meet it this time next year. It’s also a good idea to set small goals that will lead up to your bigger long-term goal. Breaking up big goals into smaller pieces can help you see where you’re making progress and give you the motivation to keep going.
2. Build Up Your Emergency Fund
One of the biggest barriers to meeting your financial goals is an unexpected – and costly – life situation. Whether it’s a flat tire, medical bill, or family emergency, surprise expenses happen to all of us. And, when multiple expenses pop up at once, it makes it harder to rebound from the first surprise, right?
While the unexpected costs of life are always a headache, a fully-funded emergency savings account can help soften the blow.
Before the end of the year, make it a priority to put as much away for emergency savings as possible. This will help make those unexpected expenses a minor inconvenience and keep you on track with the rest of your financial goals.
3. Pay Off at Least One Debt
While it might not be realistic to pay off all your debt with just a couple months left in the year, a good course of action is to try to eliminate at least one. In this case, it makes the most sense to focus on the smallest debt you owe to get rid of it within a short time window.
Whether it’s a credit card bill, cell phone payment, or money you owe to a friend or family member, put as much money as you can towards paying it down or paying it off completely. You might still have other debts to manage, but you’ll feel a small sense of relief having one less bill to worry about as you move into a new year.
4. Get Rid of Financial Clutter
One die-hard habit I have is holding onto old receipts. No matter how worn out or illegible they get, I always tell myself it’s best to keep them “just in case.” As you can imagine, this mostly results in a pile of receipts taking up a lot of space in my home.
If you have a similar habit, take the next several weeks to clear out any clutter you have, which can include things like receipts, old bills, or old bank statements. A good rule of thumb is to toss out anything you haven’t needed within the last year. However, if it’s a document you’ll need for tax purposes, hold onto it.
Clearing out old financial paperwork will help you declutter not only physically but mentally. You’ll feel more organized and ready to take on financial tasks in the new decade.
5. Start Automating
Nothing frees up your time like setting automatic payments for your recurring savings goals and expenses. You might be reluctant to try it at first if you’re worried about overdraft fees. That’s understandable, so start off with automating just one bill.
Better yet, start by automating your savings and then work your way up to automating bills. Saving a certain amount of money is probably a goal you’ve set for yourself anyway. By automating, you’ll be moving toward your goal without even thinking about it. Adding in this simple strategy, along with your other year-end checklist items, will get you well on your way to financial security.
Get Financially Ready for a New Decade
By following the 5 steps above, you will begin to get your financial house in order, positioning you for success in the new decade.
If it feels like it’s too much, tackle one step at a time on your financial checklist – making sure to automate, as this makes it simple to save more money!