Wow… time indeed flies very fast nowadays everyone. It seems like it was just yesterday. This is scary right? With the Coronavirus pandemic that hit the global economy since last March, we can’t believe now all of us are in the month of December and it is almost end of the year! This unexpected pandemic has greatly affected our lifestyle in various ways. Many aspects change tremendously such as on how we communicate with others physically, the new approach of working from home, the upsurge of online education, business and others.
Nevertheless, while we are still adapting ourselves towards these new norms in our lives with many tasks at hand, an important task that we shouldn’t disregard amidst the December bustle is to go through a financial checklist. There are a few financial things in which we should concern and think about before the year 2020 comes to a close. Thus, here is a checklist of key things to help us start the New Year in better financial shape.
1. Evaluate your money mistakes
Throughout the months of year 2020, we probably did a few mistakes during managing our finances. Now, December is the best month to review all our expenses and overall spending that we made for this year. Hence, we need to list out any financial mistakes, to ensure that we will not do it again next year. For example, we can ask ourselves these kinds of questions: Have we chosen the wrong credit card? Did we spend mindlessly? Are we putting off our financial future? This strategy will help us to remember everything and surely to guide us on revising our budget and setting up financial goals appropriately.
2. Review your financial goals made for this year
There are many things in mind when it comes to financial goals. However, we need to take time to do a review of everything, whether we did accomplish a certain financial goals for this year, 2020. We can ask ourselves the following questions:
How much did we allocate for emergency savings?
Did we manage to pay off debts properly this year?
What financial goals did we achieve?
Most importantly, we need to ask ourselves whether we did set any financial goals for the year 2020. Hmm…suffice to say we need to review how we did. If we haven’t set any goals yet, now this is the best time to think about some financial goals you aim to achieve and set this time around. One step at a time, it’s never too late everyone.
3. Check your current financial standing
It is crucial for us to review our present financial position in December. We can do this by reviewing our net worth. However, if we still have debts, we need to ensure that we will work on a plan to continuously pay them off for the next year. We just need to make sure that our debt situation is in order. In other words, if we don’t have a lot of debts, we may have a positive net worth. By reviewing our financial standing, we are then be able to alter our financial plan and goals for numerous purposes such as savings, child’s education, emergencies, retirement, vacation and many more.
4. Re-evaluate your insurance policies or needs
We need to regularly check our types of insurance, to make certain that we are properly insured all this while. Be it life insurance, health insurance, auto insurance and others. All we have to do is to review each policy and make sure that it still meets our personal or family’s current needs. The main key is to ensure that our insurance policies will cover everything of value for a reasonable period of time and of course, we do want to avoid over-allocating money for them as it can be used for other financial needs such as savings and emergency purposes. If we did over allocate them, we need to readjust our insurance coverage and consult with their agents to restructure our monthly contributions or seek for assistance.
5. Review your savings rate
One of the things that we need to do during our end-of-year financial checklist is to figure out just how much money we are saving for the year 2020. The total of how much we save depends on how much we spend every month. The sooner we track our savings rate, the sooner we are able to save up for emergency fund, retirement and paying off debts. Hence, tracking our total savings will assist us to plan our budget in advance for 2021’s financial goals.
6. Set your new financial goals for 2021
After we have reviewed all our financial aspects, now it’s the time to set new financial goals for next year. We all have different goals in life and every year the financial goals might be varied depending on our life’s circumstances. Things do change every year, isn’t it? Whatever our goal may be, we just need to have the guts to work on it and keep it center in our life. Although sometimes we may stuck with our common spending habits, but we should always keep those financial goals in mind. Only with good financial mindsets, we will then be able to stay motivated to make progress in the long run and do what we want to achieve over the next year.
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