First 3 Things to Do in the New Year

April 6 - Now
Image by iowa_spirit_walker via Flickr

With the new year looming, it’s the perfect time to review the things that may not have gone as well as planned in the current year, and plan ahead for the coming year, to make sure things go well from now on.

To get a good start in the new year, you should focus on three things.

1.  Budget.

A good budget is the basis of every successful financial plan.   If you don’t have a budget, you have now way of knowing how much money you have to spend on your necessities or you luxuries.  Do you really want to guess about whether or not you can afford to get your car fixed, or braces for your kid?   I’ve gone over all of the essentials to make a budget before.  Now is the perfect time to review that series and make sure your own budget is functional and ready for the new year.

At the same time, spend some time thinking about how your what has gone wrong with your budget over the previous year.   In my case, when we got back from vacation in August, our mindset had changed a bit about spending money, and we got out of the habit of staying strictly on budget.   By the time we got back on track, it was Christmas and our plans got shot, again.   If it weren’t for my side hustles–money that I don’t track in the budget because the money isn’t consistent, yet–we would have had some serious problems this fall.   Where have you gone wrong, and what could you do to improve next year?

2.  Credit Cards and New Debt.

In the new year, if you haven’t already done so, make sure you throw your credit cards away.   The most basic law of debt reduction is, “If you don’t stop using debt, you’ll never be out of debt.”   That’s why you need to set up your budget first.  Make sure that your expenses are less than your income, so you can make ends meet without having to charge the difference.

How has your debt use worked out over the last year?  Have you used it at all, or have you eliminated the desire to pay interest?   What have you used your credit cards for?  How much of that could you have done without?

3.  Estate Planning.

Now is the time to make sure that all affairs are in order, if the worst should happen.   If you die, what happens to your money?  Your kids?   I’ve gone over everything you need in an estate plan before, so I won’t beat that horse again.    You owe it to your family to make sure they are taken care of if something should happen to you.   At a bare minimum, write a will and get it notarized.

Have you putting off writing your will?   You know you need one, but it’s a morbid thought, so it’s easy to put off, right?  Get over it.  If you love your family, you’ll do better and get your affairs together next year.

That’s a good financial start for 2011.   What are you missing in your financial life?

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  • 3 comments

    Comments

    1. Hey LRN, excellent advice and great to be getting people motivated to tackle these very first thing.

      Happy New Year (almost).

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