The most popular New Year’s resolutions tend to be centered around health and fitness. While that’s important, this is also the perfect time to take a deep dive into your finances to stay on track for the upcoming year.
Review your budget: This is a main pillar of your financial life. Look over the past year to see if you strayed from your budget. If you spent more, figure out where most of the funds went. Then see if you can cut costs from that category. If you spent less, calculate how much less and take on debt reduction more aggressively or increase your savings.
Review your net worth: Your net worth is calculated by subtracting what you owe from what you own. If your net worth decreased from the past year, ask yourself why. Did you buy a new house? Is there more outstanding debt on credit cards? Your net worth is the truest gauge of where you are overall in your financial life and can give you the best picture of how you are faring. We have a tool at oXYGen Financial to help our clients keep track of their net worth on a daily basis.
Shop your bills: I’ve mentioned this before, but shopping your bills is an easy way to slash your expenses.
Set goals: Set your financial goals for the upcoming year. Do you want to save more for retirement, save to make a certain big purchase or go on a trip? Having these conversations early and starting your savings plan will get you that much closer to accomplishing them.
Review insurance coverage: Insurance coverage is not “sexy;” therefore, it is most likely not at the top of everyone’s list. However, it is extremely important. If you’ve received a pay raise, it could be a good idea to increase life insurance coverage and disability insurance coverage. Also, make sure you are fully covered on homeowner, auto and medical coverage for the year.
No one wants to realize they are worse off financially this year than last year. Set goals, stick to them and reach out to us at oXYGen Financial for additional financial tips.
Allison Nye, Wealth plan design specialist at oXYGen Financial. Co-host of “They Don’t Teach You This” podcast. Connect with her at email@example.com.