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A Year-End Personal Financial Review: Setting the Stage for a Positive New Year Thumbnail

A Year-End Personal Financial Review: Setting the Stage for a Positive New Year

By: Amy Getz, CPA, CDFA®

As 2023 draws to a close, it's the perfect time to reflect on our financial journey over the past twelve months and lay the groundwork for a positive start to the new year. Let’s explore some key steps in assessing your financial health and tips on how to begin the new year on a positive financial note.

 1. Review Your Cash Spending Plan:

Start by revisiting your cash spending plan for the year. Evaluate your income, expenses, and savings goals to determine if you stayed on track. Did unexpected expenses arise? Were there areas where you could have saved more? Analyzing the data can provide insights into your spending habits and help you make necessary adjustments for the future.

 2. Assess Your Debts:

Take stock of your outstanding debts. This includes credit card balances, loans, and any other liabilities. Calculate the total amount owed and review the interest rates on each debt. Consider creating a plan to pay off high-interest debts first to save on interest payments and accelerate your journey toward financial freedom.

3. Emergency Fund Check:

Check the status of your emergency fund. It’s recommended to have three to six months' worth of living expenses set aside in case of unexpected events. If your emergency fund is not where it should be, plan to gradually build it up in the new year.

4. Retirement Savings Review:

Examine your retirement savings accounts, such as 401(k)s or IRAs. Ensure that your contributions align with your long-term goals and make any necessary adjustments. If your employer offers a matching contribution, make the most of it to maximize your retirement savings.

 5. Tax Planning:

As the year-end approaches, review your tax situation. Consider making any last-minute contributions to tax-advantaged accounts and explore potential deductions or credits. If you anticipate significant changes in your financial situation in the coming year, consult with a tax professional to optimize your tax strategy.

 6. Set Financial Goals for the New Year:

With a clear understanding of your current financial situation, set realistic and measurable financial goals for the upcoming year. Whether it's saving for a major purchase, paying off debts, or increasing your investment contributions, having specific goals will provide direction and motivation.

 7. Create a Financial Calendar:

Organize your financial responsibilities by creating a financial calendar. Include dates for cash spending plan reviews, debt payments, and check-ins with your financial advisor. Having a structured plan will help you stay on top of your financial commitments throughout the year.

 A year-end personal financial review is a powerful tool for gaining control of your financial future. It helps you make informed decisions and set achievable goals for the new year. Please let me know if I can serve you in any way in the new year.