Samantha Foss is an entrepreneur and financial management specialist. In the following article, Samantha Foss discusses the reasons why everyone should create a financial checklist as part of their resolutions for the new year.
Most new year’s resolutions quickly fall by the wayside. Financial goals shouldn’t be among them.
Getting up early to hit the gym often doesn’t last long. For many, neither does quitting alcohol or cigarettes. A garage that desperately needs it is still waiting on an organization.
But if there’s one resolution to stick to in the new year it’s creating a financial checklist to better manage money. With a checklist, Samantha Foss explains that the new year doesn’t just start well financially — it tends to stay that way.
Elements of an Effective New Year Financial Checklist
Samantha Foss provides a few of the key ways one can commit to a fresh financial start in the new year.
• Samantha Foss Says to Take a Hard Look at a Budget
The beginning of the year is the perfect time to revisit a household budget to look for financial progress — or lack of it.
Review monthly income, adjusting as necessary. Take stock of financial goals outlined in a budget. Were goals met during the previous year? Did any stall? Are any no longer a priority?
Samantha Foss says that both variable and fixed expenses should be reviewed as well. These often change over the previous year and if new goals are added for the new year, variable expenses may need to be tweaked accordingly.
Updating a budget can either be done through a money management tool, such as a website or an app, or a simple online spreadsheet. It can even be done by hand. The key is taking a comprehensive look and committing to tracking income and expenses again in the new year.
• Tackle Debt
Samantha Foss says that many people are not in the best place financially after the holidays. In the United States, holiday spending overall was a record $889 billion.
While the likelihood of tackling debt right away in the new year is slim, that doesn’t mean debt should be ignored. When finished with a budget, look at the debt situation that’s being dragged into a new year.
There may be new debt to add to the old date, or perhaps debt totals went down due to successful planning over the past year explains Samantha Foss.
Either way, financial goals in any year should include some sort of plan to lower debt.
• Write out Some Goals
A financial strategy feels incomplete without at least a few money goals for heading into the new year. These may be small (cutting back on spending money on gas or travel) or large (saving to buy a new home or car) but grounded in reality.
Samantha Foss explains that financial goals are aspirational but should also be achievable.
• Review a Credit Report
A credit report is the most important information one can receive about their financial state explains Samantha Foss.
Especially if a credit report has not been reviewed in ages, the new year is a good time to ask for a free copy from the major credit bureaus.
The report and the associated credit score will shed light on financial status as well as areas that may need to be improved over the next year, especially if there are major financial goals like buying a home or renting a new apartment.
• Don’t Ignore Savings
Any good yearly financial plan includes some approach to savings. Samantha Foss explains that this may have been an amount automatically drafted from a paycheck, such as a 401(k) or another form of retirement savings.
This could be in the form of an emergency savings plan to plan in case of a physical emergency or losing a job.
Or this could be just in the form of an average savings account that is paired with a checking account. Either way, spend the new reviewing overall savings and writing out an approach to savings for the entire year to come.
• Look at Insurance
Yes, insurance is necessary, and yes, it can be a pain to keep up with. But it pays each year to review certain insurance plans, especially those that change in rates, such as car insurance. Samantha Foss says that there are usually savings to be had when comparing rates each year for both car and home insurance.
Don’t forget to set a reminder to begin reviewing insurance coverage for medical care, disability, and life categories in the middle of the year to see if there are better deals out there if needs have changed.
