Whether you believe it or not, we are just a short seven short weeks or so from ringing in 2014. If you’re like me, you may feel like this year has flown by and the prospect of a new year is a bit on the nutty side. While it is crazy, I like to be prepared and the impending new year is a great reminder that it’s a perfect opportunity to look at how we can financially prepare for the dawn of a new calendar year.
Take a Look at Those Expenses
I know, we all spout the need to analyze our expenses in the PF blogosphere, but even though it’s an old idea, it is incredibly vital. Year-end is a better time than ever (really it’s important all the time) to look at how you can cut your expenses to help you financially prepare for the new year. This might mean looking at your budget but it ultimately means to look at how you can streamline your expenses so you can start to find more ways to have your money work for you as the new year rings in as opposed to being enslaved to your old spending ways.
How is Your Investing?
When I worked in the investment industry, many investors waited until the last minute to look at their investment accounts. Not only did this not help them financially prepare for the following year, it also meant that they likely missed out on things during the current year. I would always ask “when was the last time you looked at your investments” and the question generally resulted in silence on the other end of the line as they couldn’t answer it. If that is your case, I highly encourage you to take a look at your portfolio and see what might need to be done in the following year. Do you have a 401k? If you do, that is the perfect place to start and see how it has been performing and look at a possible rebalance. Not only will this help you as you financially prepare for next year, but for much longer as well.
Financially Prepare By Looking at Your Use of Time
As I look at how I can better financially prepare for next year, one of the first things I look at is my use of time. Am I wasting my time, or am I being efficient and maximizing it? How does this apply to your finances you ask? Very simply, the more efficient you are with your time, the more of it you have to either enjoy life or make money during it. Are you trying to pay off debt or would you like to have more to invest in the stock market? If so, then streamlining your time can help you earn more to either slay the debt beast or have more money to invest. Start by looking for ways you’re wasting time and look for ways to cut down on it and be open minded to how you can change those ways. You’ll be surprised at how that time savings can benefit you as you financially prepare for next year.
What are you doing to financially prepare for next year? What did I leave out?
Image by Przemek Wiech / Flickr
I still need to max out my ROTH (or at least try)! I’m so bad about contributing regularly, I always wind up just investing a big chunk all at once at the end of the year.
We’re in the same boat Stefanie. We’ve been putting the cash aside, but haven’t yet put them in SEPs or in our Roth accounts. I think part of it goes back to the fear of the unknown in running our business, but we’re committed to just investing it each month next year.
I really like the tip about checking your expenses. It’s easy for lifestyle creep to set in and discover that you’ve unexpectedly started spending more month-to-month than you were the same time last year.
I love the audits of your budget and your investments, and was pleasantly surprised by your call to looking at how you are investing your time. Why would we underestimate the importance of efficiency in regards to our time?