As you begin to start taking down the holiday decorations for the year, you know winter is officially here and that the New Year is just around the corner. In Spokane, the snow has just seemed to arrive and Spokanites all over town get back into their winter habits of shoveling snow, salting the sidewalks and doing all the other tasks needed to prepare for the long winter ahead.
We prepare for winter, so why don’t more of us get in the habit of preparing to be in financial shape come January 1st? Now is a wonderful time for redirecting your thinking from financial apathy to a strong, focused effort to become more financially independent and secure in the New Year.
Read on for some simple steps you should be taking this January to set the foundation for your best financial year yet.
- Know how to start over if you need to.
If you’ve had a rough 2018 and 2019 is all about rebuilding, then you might want to focus on prioritizing savings and re-establishing your credit. Start slow and remember not to bite off more than you can chew. A goal of having six months’ worth of net income in the bank is a great place to start, and making sure to make on-time payments can help rebuild your credit over time.
- Share your 2019 goals.
Sharing financial goals with friends, or even strangers on social media, can help you articulate what your top goals are and also hold you accountable. Not matter if its money, health, or career related, studies suggest that making public statements about goals helps people maintain a stronger commitment to them.
- Work towards eliminating debt.
Don’t be afraid opening your bank statements because you dread the holiday shopping hangover. Make sure that not only your checking accounts but also credit cards are in line, and keep an eye out for correct return credits and false charges. If you spent more than you’d like over the holidays, now is the time to make a plan to pay it off. Figure out how much you can afford to pay off each month and post it someplace you will see if every day, like your bedroom, bathroom or closet. That constant reminder will help you will yourself to make progress. Alternatively, you can use that new 2019 calendar to keep track of your financial goals each month.
- Get on the same financial page as your partner.
Coordinating your spending and savings habits with your partner can not only lead to a smoother relationship, it can also mean more money in your joint bank accounts. If you haven’t already, sit down with your partner to discuss any goals or big plans they want to achieve financially in 2019. Even having a quick monthly get-together to review finances can be a simple and productive habit to establish strong money habits.
- Check your credit score and credit report.
At a minimum you should be checking your credit report every 12 months – it’s free, it’s an important step in rebuilding and maintaining good credit, and integral to staying on top of your personal finances. There are a number of ways to check your credit score for free (check out AnnualCreditReport.com), and there are even banks and credit cards that offer a free copy of your FICO score with each bank statement.
- Review your insurance policies.
Life insurance is not particularly fun to take out, but it is an essential part of safeguarding you and your family’s financial security. Reviewing your policies once a year is a great way to make sure they are in good standing and you have enough coverage. You can also check if your employer offers supplemental coverage as part of their benefits.
- Revisit your budget.
A budget is a realistic roadmap to get you to your financial goals, and it doesn’t have to be complicated or expensive to be effective. If you don’t already, get in the habit of entering your expenses into a spreadsheet or notebook, use an app, or use your monthly bank statements. If you already have an established budget, set aside some time to review it and make any changes for the upcoming year – trips you have planned, home repairs you anticipated making, et cetera. You will be so prepared for anything that comes your way in 2019!
- Remember to reward yourself.
Once you have a plan in place for the New Year, make sure to remember to reward yourself once you hit each milestone. Try to stay away from new purchases, and focus on finding rewards that add to your health mentally and physically, such as a nice day of snowboarding, biking, or a game night with your loved ones.
Remember, the best things in life are free. But it’s much easier to enjoy those things if you have a strong financial system in place to help you weather any storm. That way, when the calendar page changes, you’ll be prepared for the year ahead and already in the mindset for financial success.