With the new year right around the corner, one of your goals might be determining how your finances pan out next year. But it’s important to wrap up loose ends and tidy up your finances for this year before you step into 2023.
Managing your personal finances can be intimidating, especially if you have been putting off the task for a while. According to APA’s 2020 Stress in America survey, 64 percent of respondents report that money is a significant source of stress.
Unorganized finances can further contribute to this stress and make it challenging to reach saving goals, debt repayment plans, or keep up with budgeting. Following a strategic plan to tidy up your finances will allow you to step confidently into the following year.
Review & Adjust Your Current Budget
Reviewing your budgets gives you a better idea of your financial health and allows you to make informed financial decisions. Go through your current budget to determine which expenses no longer serve you and eliminate them before you head into a new year.
Consider the expenses you expect the following year to create an accurate budget. Is your child going to college? Do you have to pay for a wedding? Are you planning on buying a new car? Identifying your expenses for the following year can help you adjust your budget to adapt it to the new year.
Arrange Your Debt by Size
Getting rid of all debt at once would be ideal, but that goal can take time. Arranging your debt by size can reduce expenses and help you stay organized. You can do this by listing down all your loans and sorting them out based on the balances and interest rates. The goal is to pay off the debt with the highest interest first.
Organizing your debt gives you a better idea of which companies to avoid when you seek a loan. You want to choose a company that best serves your interests and simplifies your life instead of adding a burden. For instance, choosing a platform like GoDay allows you to gain access to cash when you need it quickly. Their simple online application process makes it easier for individuals seeking personal loans to get approved without filling out lengthy applications or visiting the bank.
Automate Your Bill Payments
Paying bills late can result in penalties, overdraft fees on your account, and damage to your credit score. Preauthorizing your bills for the next year can reduce the risk of late payments and allow you to focus on other financial matters.
Automating your bills saves you time visiting different websites or scrambling through invoices. It can also increase your credit score as there is a lower risk of a missed payment.
Create an Achievable Investment Plan
An achievable investment plan is a great way to put your money toward wealth-building goals. Whether you invest your income, savings, or funds acquired through a short-term loan, investing your money can help you reach your financial goals.
Before investing, study the stock market and research tried-and-true principles to avoid costly mistakes. Once you’ve figured out the basics, create a financial goal for the next year and start investing before the year ends to reach your goals sooner.
Educating yourself is one of the most impactful things you can do to improve your financial health. Use this guide to tie up any loose ends and end the current year on a strong note.