Welp, another year has come and gone. And, unless you’ve been living under a rock the past year, it’s time for another year! There’s something about a fresh start (like a new year, a new week, or a new month) that just gets me motivated. Granted, to be successful, we need to be motivated all the time. However, a new year is the best time to get the momentum flowing. I want you to make the most of the new year, and I know exactly how you can do so! Check out 5 ways to financially prepare for the new year.
5 Ways to Financially Prepare for the New Year
#1 Do a deep dive of your current financial situation
There’s nothing like having clarity in your situation before moving the direction of your goals. You don’t want to stay in the same spot year over year, so you need to know where you currently stand before you can move forward. In order to financially prepare for the new year, you’ll want to deep dive your financials.
If you want to get clear on your current financial situation, I walk you through conducting your deep dive in the article How to Complete Your Year End Money Review. To deep dive your financial situation, you’ll want to look at how much money came in over the course of the year and how much money went out. Did you reach any financial goals? Did you add to your savings?
Don’t worry if things don’t look how you want them. You just need to know what they look like, so you know how to move forward in the new year. This activity may take some time, so block out a few hours to ensure you get through it. This is one of the best things you can do to prepare to make money moves in the new year.
#2 Set a financial goal or two
What do you want to accomplish in your finances in the new year? Setting a financial goal gives you something to work towards. You’re moving with intention in your finances, and that’s a recipe for success. When you create goals, you take your dreams up a notch. You make them attainable, in the form of a goal.
There are certain prerequisites for successful goals, though. Successful goals need to follow the SMART criteria. They need to be specific, measurable, attainable, realistic, and time-specific. If you want some guidance on setting money goals, read The Best Way to Set Your Money Goals for the New Year. I walk you through getting clear on your goals.
I always like to advise my clients to focus on 1 goal at a time, especially if things are already tight with their budget. When you focus on too many goals at once, you spread your resources thin. That slows you reaching all of the goals. Instead, focus all your resources to one goal, so you achieve it faster.
If you have a large monthly profit in your budget, you can get away with focusing on two financial goals at once. This is a great place to be, and a great place to work towards. You’ll get into a rhythm with your goals and will know if you can afford to focus on more than one at a time.
#3 Make sure you have all of your systems in place
I hope I’ve piqued your curiosity! Yes, you absolutely can have systems in your finances. In fact, you’ll want to have them. Systems are things that help make managing your finances a little easier. Think things like direct deposit, automatic savings transfers, and automatic bill pay.
You can also leverage different bank accounts to build systems in your finances. For example, you could have a checking account for your bills and a second checking account for your fun spending. Transfer exactly what you need to spend on fun into your fun spending account. The rest goes to your bills checking account. Viola! You have a system for managing your spending.
Have you been putting off getting certain systems and automations in place? Get them in order for the new year, that way it’s one less thing to worry about. Since you have your goals identified, you’ll know how much you’ll need to get your systems up and running. Before you know it, you’ll have a well-oiled machine in pace for the new year. Read Automate Your Finances in 5 Steps for more details.
#4 Move into the new year with money in your account
In the past, the holidays would run me dry. I’d spend too much money on gifts for other people, and worse, myself! To help me get a handle on my holiday spending, I started the Frugal Fall Savings Challenge. There’s no better feeling than know the holidays didn’t leave you broke or with extra debt.
I want you to move into the new year with money in your account. When you do so, you’re starting the year ahead, not from zero. Not from behind. If you want to prepare for a financially successful new year, the best way to do so is with money already being in your account! How do you do that? Don’t overdo it on the holiday shopping! Create a budget and stick to your limits.
#5 Get rid of any excess financial baggage (subscriptions, expenses)
Finalizing the list of ways to financially prepare for the new year is getting rid of any excess financial baggage. Do you have subscriptions you aren’t using? Do you have certain bills you’ve been meaning to get rid of but haven’t done so? Now’s the time to let go of any unnecessary bills and expenses.
When you’re doing a deep dive of your current financial situation, make sure you run through your recurring bills. That way you can keep an eye on things that shouldn’t be there. You’ll feel so much lighter ridding yourself of useless expenses that are taking your money.
The new year is coming, whether you like it or not, so you may as well set yourself up for success! The ideas above will help you financially prepare for the new year and start January with a bang. When it comes to your finances, motivation and preparation make all the difference. Do you have any resolutions set for the new year? I’d love to know! Drop a comment below to share and put them out into the universe!