Giving yourself an end-of-year financial review is a great way to start the New Year with your finances in top shape. Here’s all you need to know about this end-of-year ritual.
Step 1: Review all your debts and create a payoff plan
List all of your debts and their interest rates. Have you made any real progress toward paying them off this year?
If your debt needs some help, you have two primary options for how to proceed:
- The avalanche method. Focus on paying off the debt with the highest interest rate first. When it is paid off, continue onto the debt with the second-highest interest rate. Move through the list until you’ve paid off all debts.
- The snowball method. Work your way through your debts, starting with the lowest-balance debt, and then move to the next, applying what you would have paid to the previous debt. Repeat until all are paid off.
Step 2: Automate your savings
Make savings easy by making it automatic. Give us a call at 651-770-7000 to set up an automatic monthly transfer from your checking account to your savings account. This way, you’ll never forget to put money into savings again.
Step 3: Review the progress you have (or haven’t) made on financial goals
Have you made measurable progress toward your financial goals in 2020? Take a few minutes to review your goals, taking note of your progress and determining how you can move toward better achieving those you didn’t quite achieve.
Step 4: Set new financial goals for 2021
As you finish reviewing your financial progress for the past year, look forward to accomplishing greater financial goals in the coming year.
Set goals that are SMART:
Specific
Measurable
Attainable
Realistic
Timely
Wishing you a financially healthy New Year!