Only a couple short weeks until we ring in the new year! It’s that time of the year that resolutions are made, gyms and fitness clubs filled to the brim, and we begin to really take life seriously…for a couple months anyways. Well in addition to making your new year resolutions, let’s go ahead and add a checklist for the new year as well. This financial checklist will be comprised of all the thing you should be focusing on the new year, and you might find some stuff on the list that you didn’t consider this year.
1.) Tax Planning – I put this first on the list because the earlier you start the easier the decisions get towards the end of the year. Maxing out your 401k and IRA contributions is easier task to achieve when you devide the financial burden over 12 months. Though I will say that fiscal cliff does sort of leave us hanging this year, but there are still tactics you can put in place regardless.
2.) Set Your Budget – People tend to put this off each and every year. This is another must do on the list, and one that should be started immediately. Putting together a manageable budget for the entire year can ensure that you remain financially stable and sound. And when I say the entire year I mean it… 12 months of planning and forecasting in the very first month of the year. It’s alright to change the number as you go, but don’t go into the new year flying blindly.
3.) Refinance – The rates have been dropping, and while most able people consider this a no-brainer you might be surprised by how many people are unaware of the benefits of locking in a lower rate. Rates are definitely at a historic low, and while they are likely to stay in this range I would recommend refinancing now so you can start saving instantly. Many companies are willing to do no-cost refinances, where the cost of an appraisal is the only out-of-pocket money you need to worry about.
4.) Food, food, food – People have no idea how much they spend in a month on going out to eat. They falsely assume that carry out isn’t included, or the ready-made meals at Costco and Kroger don’t count because they were purchased within the confines of a grocery store. The truth is that ANY prepared meal is equivalent to dining out. A tip for the waitstaff may not be included, but most of the cost of dining out is the charge for preparation of a meal. Simply cut back on this in every way!
5.) Entertainment – Next to food, this is probably the next biggest expense each month. Going to the bar, a concert, or simply the movies can be costly. Have friends over, budget a certain number of concerts in a year and stick to that, and find coupons for the movies…or just stay home and rent one. There are a lot of ways you can enjoy yourself without spending money, you don’t need to cut it out of your life entirely, just reduce how many you are currently spending.