The New Year

We are going to be heading into a new year soon, and I thought it would be important to set everything in motion to make the most of it, right from the start. Embarking on a new year offers a terrific opportunity to revitalize your personal finances and set the stage for financial success.

First and foremost, let’s take some time to reflect on the previous year by taking stock of your financial journey in the past year. What worked well? Where did you encounter challenges? By answering these questions, you can better understand your financial landscape and how it sets the foundation for meaningful improvements.

Be sure to set clear goals. Define specific, measurable, and realistic financial goals for the upcoming year. Whether it's building an emergency fund, paying off debt, or investing, having clear objectives provides you with the direction that you need to start strong.

If you have been going along the past year without a budget, now is the time to change that for the better. Develop a detailed budget that outlines your income, expenses, and savings. A well-structured budget serves as a roadmap for managing your money effectively, and it is the most important weapon to have in your arsenal if you plan to reduce or eliminate debt in the coming year.

If you haven't already, prioritize building or replenishing your emergency fund. This financial cushion can help mitigate unexpected expenses without derailing your overall financial plan. Many folks tend to tap into their emergency funds during the shopping season, and if you ended up doing this, now is the time to make it a priority to get that money back into the emergency fund. Remember to have at least one month’s worth of expenses in the beginning, and once you’ve paid off your debts, aim for three months to six months saved for your regular expenses.

It’s also a good time to explore additional income streams. Investigate any opportunities that you can think of for additional income. You may look into a part-time job or similar activity such as delivering pizzas, delivering food via DoorDash or a similar entity, or working on a side business that you don’t need a lot of money up front to begin.

Approach the new year with optimism and a proactive mindset. Small and consistent steps can lead to significant financial improvements over time.