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How Reviewing Your Finances Before the Year Ends Can Bring in the Next One Even Better!

Now that the holiday season for 2017 has officially arrived, it is easy to become wrapped up in gifts, parties, and all of the exciting festivities of this season.  Although these times bring about a lot of excitement and joy, it can also leave you with a “financial hangover by the beginning of the year,” states Melanie Lockert, personal finance writer and author of “Dear Debt.” With all of this planning and spending for gifts and holiday-themed parties, how can one even think about personal and financial goals?

Well, don’t wait for the new year to hit “reset” on your personal and financial goals.  According to Lockert,  financial review and goal-setting should never begin at the jumpstart of a new year.  She remarks, “to be successful, consider getting your finances in order now so that you can be on the right foot when the new year begins.”  She recommends these five quick steps to jumpstart your finances before the  year ends:

1)  Perform a Financial Review –  Lockert states that you cannot just look ahead to be successful, you have to look back as well.  Before creating financial goals for the new year,  perform a financial review and assess how your year went. This way you can find out where your strengths and weaknesses lie.

Questions to consider:

  • Did my income go up or down this year?
  • What percentage of income did I spend on my expenses?
  • How much debt did I pay off?
  • How much was I able to save in a savings/401(k) accounts?
  • Does my credit score make sense? Be sure to check for suspicious/fraudulent activities on your report.

2)  Change it Up – Make little changes to your finances by experimenting with cash-only budget categories instead of a debit/credit card. For example, using cash for monthly food and drink spending can successfully shave off $100-$200/month on expenses.  Continue to experiment until you find something that works for your unique situation.

3) Set Aside 30 Minutes Per Day – Sandy Smith, personal finance blogger, recommends spending 30 minutes per day for 30 days in December to review finances before the new year. She says, “check your bank accounts, update life insurance beneficiaries, get tax documents together, update 401(k) allocations, and carefully review your credit report.” This way you will be in shape to tackle everything coming your way financially by the start of the new year!

4) Make Year-End Donations – If you are feeling in the holiday spirit, consider making tax-deductible donations to qualified charities. It can help in two ways by a) causing you to help a cause you believe in, and b) having the opportunity to deduct that contribution from your taxes. According to the IRS’ website, “ a taxpayer must have a bank record or a written statement from the charity to deduct any donation of money, regardless of amount. The record must show the name of the charity, the date, and amount of the contribution.”

5) Set Those Financial Goals for the New Year – During the new year celebration, many people tend to focus on health and wellness, but ignore their financial health and standing. However, Lockert reinforces that “your finances impact the rest of your life, so it is key to set those financial goals too.”

With these great tips and suggestions, Reverse Mortgage Answers is confident that you will be in good financial standing.  If you want to make a Reverse Mortgage part of your financial plan, please give us a call toll-free at 1-800-420-5515.