10 Tips to Get Your Finances In Order Before the New Year Comments51 Comments

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While most families wait until the New Year – presumably after setting goals for the upcoming year – to get their finances in order, there’s no reason to waste precious months when you can get tackle them now!

With a full two months remaining in 2012, there’s no better time to give yourself a full financial review and make sure you’re doing all you can to set your family (and your future) up for success in 2013.

10 Steps to Get Your Finances in Order Today

1. Review Your Budget (or Create Your First One)

If you’re anything like me odds are that you relax on your budget from time-to-time. As the holidays approach and lives become hectic with fall activities, take a step back and analyze your spending patters over the last few months. If you’ve gone a little overboard with groceries or eating out, refocus your efforts and keep yourself accountable to your goals over the next few months.

If you’ve yet to establish your first budget, whether individually or as a family, there is no better time than today to get started. Schedule a meeting with your wife to talk about where you’re at in life and where you want to go. There isn’t anything more important than communicating with your wife and establishing your first budget together.

2. Develop a Debt Payoff Strategy

If you carry a credit card balance or have student loan, vehicle, or medical debt, then focus on coming up with a debt payoff strategy. Whether you follow the Dave Ramsey philosophy of paying debts down from smallest to largest, or prefer the mathematical approach of paying down the high-interest rate debt first, the only part that matters is that you develop a strategy of some sort.

While some may prefer traditional debt payoff strategies, others may need to consider debt consolidation or analyze the chance to save hundreds of dollars in interest by transferring high-interest credit card balances to 0% balance transfer cards.

3. Analyze Your Asset Allocation

Reviewing your various investment accounts and rebalancing your portfolio is a must. At a minimum this should be done on an annual basis and some suggest doing it quarterly. If you’ve never taken the time to determine how your investments should be allocated, then consider doing some research on the topic over the next few weeks or consult with a financial advisor and get some professional guidance.

4. Shop Your Insurance Rates

There isn’t a more common area where people “set it and forget it.” It’s too easy to get complacent and stay with the same insurance carrier for years; so, if you haven’t shopped your auto and home insurance rates in awhile then make it one of the first things you do. Odds are that you’re losing precious dollars (often hundreds) each year.

5. Analyze Your Bank Accounts

As our society becomes more reliant on technology, more businesses are finding ways to offer services online. Along those lines we’ve seen a major shift in the way banking is being done these days.

If you still hold your cash at the traditional brick-and-mortar banks and have been reluctant to change to some of the best online banks of 2012, then you’re likely not maximizing your debit card rewards (checking accounts) or interest rates on CDs and Savings Accounts.

6. Maximize Your Employee Benefits

As many employers have open enrollment this time of year, make sure you thoroughly review and maximize all of the benefits they offer. Particularly, make sure you’re taking advantage of the FULL company match in your employer’s retirement plan. If you’re not sure how much your company matches, then make it a point to find out over the next few weeks.

7. Max Out a Roth IRA

If you’re taking full advantage of your employer’s match, then focus on maximizing out a Roth IRA. While you technically have until tax day next year to make contributions for 2012, it’s not a bad thing to reach the $5,000 limit (if you’re under age 50; $6k if you’re over 50) before the year is out.

8. Draft a Will

A personal goal for my wife and I this quarter is to get a will. The majority of Americans die without a will and it’s due to nothing more than being lazy and lacking priorities. Visit a site like USLegalForms.com or contact a lawyer that will help you draft one. If you have valuables or children, then getting a will has to be something that you accomplish before the end of the year.

9. Review Your Mortgage

While many people have taken advantage of the great interest rates, there are still a lot of people out there that haven’t. With rates at near all-time lows, it’s possible to replace your 30-year mortgage and get on a 20-year loan while keeping your payments the same.

10. Set Financial and Personal Goals for 2013, Now

While I’ve given you plenty of goals to focus on over the next few months, it’s important that you get in the habit of making goals on a monthly and quarterly basis. Goals help to keep you focused and motivated as you work on getting out of debt or whether you’re building wealth and trying to knock some items off your bucket list.

Author Bio: Jason is a financial advisor and Dave Ramsey-trained counselor that blogs over at WorkSaveLive. He aims to educate his readers on a variety of financial topics while sharing his family’s journey out of debt.

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This entry was posted in Financial Advice, and tagged , Comments51 Comments
By : Adam | 30 Oct 2012
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51 thoughts on “10 Tips to Get Your Finances In Order Before the New Year

  1. Carrie Smith

    Oh, the new year! It’s coming up so fast. Thanks for the much-needed reminder to reassess my year-end goals and look over my financial situation. It can always be tweaked and updated!

    I’m also really excited because this is the first year I’ve been able to max out my Roth IRA. All that hard work paying off debt is paying off and feels great! Awesome post Jason!

    Reply
  2. Matt

    You’ve written this post at just the right time, I’m actually doing this NOW, rather than panicking about it in the New Year when all the bills arrive, after the usual Christmas blowout. Am hoping to get 2013 off to a good start – less stressin’ and more happiness, cheers

    Reply
    1. Jason @ WorkSaveLive

      Good luck, Matt! I think it’s so important for people not to ignore their finances until after the new year. Just like you said…most people wait until after they’ve messed everything up from the Christmas blowout!

      Reply
  3. Brian

    We are going to have to look at the will thing now that we have a baby. It has also made my parents think about updating theirs too. They realized that the last will they did was before I was even born! So apparently their first grandchild is more motivation than I was! Can’t say I blame them, the little guy is awfully cute

    Reply
    1. Jason @ WorkSaveLive

      This is just the list that everybody should go over each year…not sure I suggested anything ground breaking. Just a good reminder! :) Glad you can focus on the Roth contributions next year! Take some of that blog income and sock it away in the Roth for this year!

      Reply
  4. Cat

    This is a great to do list – to be done now or any time. Even if seems overwhelming, you could break it down into a few tasks a month. I need to get going on the insurance thing – I never seem to get to it!

    Reply
    1. Jeremy

      For sure…if we’re going to be analyzing and planning anyway, we might as well dig into our full financial situation while we’re at it.

      Reply
  5. TB at BlueCollarWorkman

    This is great! One thing that my wife and I do every freaking year is look over our mortgage again. And one time we actually did end up saving ourselves some money!

    Reply
  6. Canadian Budget Binder

    Great guest post. We typically sit down as a couple in December and review the entire years expenses in our Canadian Budget Binder Budget Spreadsheet that we designed for us. We look at where our money went, where we made gains and any losses and how to improve for the next year. I think the planning before the year starts is key and why this post is very important for anyone wanting to get their finances ready to rock and roll before 2013 starts. Cheers Mr.CBB

    Reply
    1. Jason @ WorkSaveLive

      I love the idea of doing an annual review, but I’m too undisciplined to do it that infrequently. We have monthly meetings and our budget is very detailed, so I’m quickly able to decipher where we’ve been messing up.

      Reply
  7. KIm@Eyesonthedollar

    For once, I am on top of almost all of these, with some thanks to great PF bloggers like yourself reminding me all the time! I do like my brick and mortar bank. I used to use Bank of America online because they did some sort of match with thier ” keep the change” program. Worst customer service ever! I do have an online savings account with ING, but like to be able to go by the bank if I need to.

    Reply
    1. Jason @ WorkSaveLive

      I do find some value in brick and mortar banks, but it’s not as much as I used to. I have a total of 3 bank accounts and 2 of them are online banks. We have 1 local bank we use, but it’s definitely not for the rewards or high interest rates.

      I’m glad you’ve been keeping up on all of this stuff; it’s sounds like you’re much further along than I am! :)

      Reply
  8. Edward Antrobus

    Roth IRAs do have a minimum income “floor” as well (I’m not sure if just Roth or Traditional as well), that students should be aware of. In 2008, I only made $7000 and saved “too much” in my Roth and had to pay a penalty at tax time. And I only put $400 in that year!

    Reply
  9. Joe Cassandra

    Great list Jason! Definitely agree with shopping insurance rates. I just listened to my Dad and got whatever insurance he used without researching. Then I did research and found out my employer gives a huge discount through another insurance company…will save tons! Note to others: check if your employer gives auto discounts through a provider! Cheers Jason and Cheers Jeremy ;)

    Reply
    1. Jason @ WorkSaveLive

      Great tip, Joe; thanks for sharing that. I think a lot of employers have agreements with local gyms or cell phone carriers, but I’ve never heard of them having something setup with an insurance company as well. That’s definitely something I’ll have to keep in mind!

      Reply
  10. Pauline

    Nice list Jason. I do most of it every year, and also like to look at the past year’s number and progress on net worth to keep motivated for the next year!

    Reply
  11. Roger @ The Chicago Financial Planner

    Great list. For those who are self-employed I’d add starting a retirement plan beyond an IRA (or Roth IRA) is possible. I’m thinking in terms of a SEP or a Solo 401(k) if this fits their situation. Most major custodians such as Schwab, Fidelity, Vanguard, and TD make this easy to start and all offer a wide array of investment choices. Contribution limits are much higher than an IRA.

    Reply
    1. Jeremy

      Yep, people who are self employed may have a bit more to check over each year. Their retirement planning is sure to be one of those things since they won’t be getting any kind of company pension.

      Reply
    1. Jeremy

      Moving month is one month that it is incredibly tough to stick to your budget. Beyond the regular moving expenses, you end up having to restock food and replace all kinds of stuff.

      Reply
  12. Stable Investor

    The best thing would to make a commitment that you are going to save atleast 15% of next year’s income.
    Next would be to stay true to your commitment.

    Reply
    1. Jeremy

      Yes when you have people dependent on you, that’s not something you should ever neglect. I don’t have to worry about that yet, but maybe in the not so distant future.

      Reply
  13. Kristy Willis

    I love reading this article. Everyone should be educated in basic personal financing. I am lucky to have parents who taught me budgeting at an early age. I definitely agree that the first step in putting your finances in the right order is to budget what you earn. Another thing to consider is to eliminate debts. I think the issue on debts has been around, since people went over their planned budgets.
    As finance consultants say these days, “get out of debt and you will have financial freedom.”

    Reply
    1. Jason @ WorkSaveLive

      It’s a true blessing to have parents that raised you around the understanding of living on a budget. In my household, there was never a mention of financial topics such as budgeting, investing, or managing debt wisely. It definitely put a strain on my finances and left me in the dark when I tried to live in the “real world” on my own!

      Reply
  14. Lou Rodriguez

    And if you’re an entrepreneur or business owner, review ALL the systems and tools you currently have in place that keep your business alive, take out what’s not being affective and replace it with other business generating and growing ideas, and then finish this year strong to better set yourself up for your best year ever in 2013!

    Reply
    1. Jason @ WorkSaveLive

      Great tip, Lou! I didn’t address the business side of things much here but you’re right on. I actually am going through this process with my website and thinking of how I want to structure things for 2013. It’s pretty exciting when you plan and work on development, regardless of whether it’s on your personal budget or on the business side of things!

      Reply
  15. Grayson @ Debt RoundUp

    These are some great tips Jason. I have been doing some of these so far, but since my first born is due near Christmas, I have been taking a more fine tip comb approach to my finances and my investments. I also have to push my attention toward a will. This year is soon going to be over, so these tips should be good for anyone.

    Reply
  16. K.K. @ Living Debt Free Rocks!

    Great post Jason. My husband and I, now that we’re married, definitely need to get a will done before year end so thanks for the reminder!

    Reply
    1. Jeremy

      Yup when your life changes like that, stuff like your will definitely needs updating. You want to look after each other if anything happens.

      Reply
  17. David @ Bankruptcy Canada

    Your tips are awesome. It is really important to create and review your budget to keep your finances in order for the coming year. Next to this is to know how to pay off your debts. This is all a matter of having a sound financial sense.

    Reply
    1. Jeremy

      It would be nice to check all of this stuff throughout the year, but the fact of the matter is that most of us lead very busy lives. So it’s not always practical to keep spending time on this stuff. Checking once a year should be the minimum though.

      Reply
  18. Chris @ StockMonkeys.com

    It might sound crazy but cancel your current cell phone plan and go to an MVNO. I switched from Verizon to Ting and my cell phone bill dropped from $145 to $22 per month for two lines. Complete control and usage based pricing. I’m on Wifi all the time so I don’t need to pay for data. Ridiculous savings.

    Reply
    1. Jeremy

      That is a huge savings, but canceling a cell phone plan is usually quite pricey itself. It’s something to look into if you find yourself spending a lot on your cell phone though.

      Reply

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