There is six days left to 2014, and your thoughts are mostly considered with what you will wear to the New Year’s Eve party. However, this is a great time to review your 2014 financial plan, to see what strides you have made. Use this end-of-year financial checklist to help you focus on where you are now and what adjustments you need to make for the New Year. You don’t have to commit a lot of time, but it may make the difference as you march into the New Year knowing you are on solid ground.
- Review your spending and refine your budget. Take a look at your 2014 spending patterns. Are there areas where you were consistently over budget? Di d you have a lot of unanticipated expenses? Did you meet your savings goals? With these facts and figures staring you in the face, it will be easier to prioritize and plan your 2015 expenditures.
- Determine your net worth.This is the easy exercise you will ever do and it is definitely worth the minimal time you will invest. Simply add up what you own (savings, personal property, investments, car, etc.) and subtract what you owe (mortgage, loans, credit cards etc.). Knowing this will allow you to track your progress each year, and who knows it may give you that extra nudge to save more and reduce your debt.
- Rethink your credit card usage. Do you know the terms of your credit cards? Are you paying too much in interest and fees? Are you getting the benefits you want such as cash backs or travel points? If using credit cards is for you, then you may as well let it work for you- but try your best to pay off the monthly balance if possible!
- Make sure you’re on track for retirement.If you’ve let retirement savings slip this year, recommit to making it a priority. Up the percentage you’re contributing to a 401(k) or IRA. If you’re self-employed, consider opening a SEP IRA or a similar small business retirement plan.
- Comparison shop for insurance. Insurance needs change as your life changes.Review your health, homeowners and car insurance policies to make sure you have the right coverage at a reasonable premium. Consider life insurance if you have dependents—or consider discontinuing a policy if your kids are grown and on their own.
- Update your estate plan.New baby? Newly married or divorced? Make sure your beneficiary designations reflect any changes. If you haven’t already done so, complete an advance healthcare directive and give copies to your doctor and hospital. Don’t yet have an estate plan? Make that a new year’s resolution!
- Put whatever you can on automatic. Bills, recurring payments, even savings—the more you can put on auto pay now, the easier your financial life will be next year.
If this review shows you were on target and met your goals, congratulations! If you need to make changes of any sort, now is the time to start your 2015 planning. With this information in hand, you’ll feel in better financial control- which should make your end of year celebrations that much happier.