5 End-Of-Year Strategies To Get Your Finances In Order For 2019
2019 is already knocking. December is not only a representation of the end of the year but also the month that signal you that you need to get financially prepared for a new year. It is usually the best time to take afresh look at your budget, your goals, and make preparations. One area of our lives that may benefit from an end of year boost is our finances. You have kids that are going back to school, taxes to file, mortgage, or car loan to pay and a few more financial tasks to be performed in January.
Whether you have been on vacation the whole month, splurged all through the month, or spent all your December salary on gifts and partying, getting your finances in order is probably the first thing you will think about come new year. Financial planning helps improve lifestyle, reduce stress, and set you up for a more financially secure future. So how do you take time to invest in yourself and get your finances on track before 2019 kicks in? Here are a few strategies to help you out:
Perhaps the best gesture and financial tip you can give yourself after a long, hardworking year is a small token of self-appreciation. This is to help you focus and always remember that the most significant financial gift you have in life is the ability to work. It is a reminder to keep working hard and invest in yourself—that you are doing all this for your own sake before anyone else come into the picture. Investing in yourself means a little spoil for you, staying healthy, getting insurance to keep you covered when sick, purchasing life insurance for you and your dependents and doing what makes you happy. By investing in yourself, you are putting in place financial securities. Your future self you will be thankful for it.
Set a budget for 2019
Before the year starts, it is prudent that you call yourself a meeting and determine what you want to achieve financially. Whether it is buying a new car, family house or expanding your business, budgeting is the most popular, continuous, and valuable financial planning habit. Despite the repetition in various articles in Singapore, very few individuals set budgets for the new year and some of the few that manage to create one never stick by it. Well, the year could bring very many financial needs that may prompt you to abandon some of your goals or shelve them,however, when you focus on what you want, no amount of financial difficulty will stop you.
Maintaining a budget helps you visualize your financial goals and prioritize your expenditure. The discipline of creating the budget and sticking to it will not only get you on track financially in 2019 but also into the future as it will instill in you a positive financial behavior. Additionally, a real budget will help you identify your spending habits and know the areas that you might be overspending and cut down on them. For instance, you may not realize that you take too much coffee in a day. Coffee can be quite expensive especially when you are the brand type. It may, therefore, be tough to notice that you are overspending on that sector unless you have a budget. The budget will also help keep you on track regarding loans and guide you to prioritize on which ones are to be paid first and which ones are to be shelved.
Plan for irregular and unexpected expenses
You have your budget ready for 2019. Good! No matter how perfect or accurate you think your budget is, there will always be something unexpected coming up expressly if the budget is a long-term one, say a year. It is easy to track your own expenses from your income, but what about the unexpected? The irregular? For instance, one of your relatives gets diagnosed with cancer, and the medical bills are skyrocketing. It is almost apparent that you will contribute a certain amount towards the sick relative — other instances like wedding gifts to friends getting married and accidents may require a significant amount of money suddenly.
Those are just some of the irregulars that you may encounter during the year that may not be included in the budget. Think about those irregular expenses that may come up annually or quarterly and set aside a certain amount for them. This will heavily depend on many things in your life such as your cycle of friends, state of your family and how much coverage you have for you and your family. On the bright side, think of possibilities of promotions, a higher paying job or winning a jackpot, life is very unpredictable, you only need to be ready.
Keep an eye on your credit
If you are planning on making huge purchases in the coming year like a motorcycle, car or property, your credit score will matter the most. Therefore, as you’re budgeting focus on how to maintain it. Your credit score will determine the amount of money you will get after applying for a loan. If your credit score is poor, you are likely to get less or no money at all. However, it is easy to know your credit score and work on it before going back to the banks to apply for another one. If you suspect that your score is poor, you can start taking little amounts and paying them on time.
Get the difference between needs and wants
Now that you have a budget to focus on, the key habit is to spend less than you earn. There is also a probability that you will need to get rid of various things which you can do without. For instance, throwing a party at your house every weekend will be a no-no! Differentiate between needs and wants. Are the movies, alcohol, parties, and night outs necessary? Ditch all the “wants,” and you will thank your budget later.