Financial Decisions To Make Before The Year Ends

financial decisionsThere are a number of financial decisions you can make before the year ends to help you end the year on a high note. Doing so also helps set you up to a great start to a new year. Overall, deciding to take better control of your finances will always result in a more manageable budget. It can help you reach your goals a lot faster as well.

One of the challenges in pursuing this objective is doing it side by side with other goals you might have before the year ends. It can be that final push to get to your weight goal or planning to see and visit a family member who lives far away. It can even be getting a headstart on a business you want to put together.

However, you need to understand that in almost all parts of your life, your finances will play a big part in your goals. This makes it all the more important to try and look for ways to make it better. That is why before the year ends, here are a few things to consider to help you end the year better and even have a great start to the coming new year.

Audit your monthly budget

One of the best financial decisions you can make a few days before the year ends is to take a look at your monthly budget. Try to assess and audit how you have fared so far. Look for areas where you promised to make changes. Did you follow through on that? Try to check if your budget allows you to cover everything you need to pay on a monthly basis.

Your household budget is one of the most important tools you have in managing your finances. It should be able to balance out your income and expenses. A well-thought-out budget gives you the ability to not only cover all your basic expenses but give you the chance to save up for your future. If your budget is not able to give you these, it is a good time to make some drastic changes.

Cut one unnecessary expense

One of the best financial decisions you can ever make to end the year is to give up one unnecessary expense item in your budget. For one, this can help you manage your budget better. Especially when your expenses are way more than what you are bringing in every month. Staying in that financial situation is a sure path to a debt-ridden budget.

Another benefit in cutting out a useless expense item is that you get to save money for other use. Rather than waste your money, you can strengthen other areas of your finances. This can make your future a lot more secure. It can give you the chance to pay down some debt obligations a lot more aggressively with the extra funds in your budget. Especially as USA Today shares that the average household debt is at $137,063.

Of course, locating this expenses is easier said than done. For one, you need to sit down and take a look at your budget. If you are in denial, it might take a lot longer time to identify which expense to give up. You need to approach this exercise with a certain degree of honesty and the willingness to commit to change. These will help you identify and make the necessary changes in your budget.

Look for a way to increase your income

One thing that goes hand in hand with lowering down your expenses is finding a way to increase your income. This is one of those financial decisions that will make a big difference in your life. However, this is also not a walk in the park. It would take a lot of work and sacrifice, tapping into your network, and even identifying income positive hobbies.

Your first step is identifying where you are at present and what you have at your disposal especially time. If you choose to get a second job, do you still have time outside your current obligations for work and even for your family? If that is not possible, are there ways to earn a passive income while you stay at home? Are there investments you can tap into to help you earn money?

You can also look at some freelance gigs you can do at the comfort of your own home. You can accept some writing or editing jobs. If you are in the creative person, you can offer your services to nearby establishments for their design needs. You can even look at your hobbies and see how you can monetize them. You can offer to be a photographer for some events or even bake some cookies for a party.

Revisit your biggest financial challenge

Over the course of the year, you could have gone through some challenging times. One of the best financial decisions you can do with those hard times is to revisit and look for the lessons it taught you. There is some truth to what other people are saying that what does not kill will and should make you stronger and a better version of yourself.

It could have been being let go from a previous job. It is challenging enough on its own but if you are not prepared financially, it could be devastating. Another thing is that it could also be an investment that went sideways because you did not know anything about it in the first place. Be more cautious with the financial decisions you make and think things through so you do not go through the same problems.

Check your reserve funds is one of the best financial decisions to make

As you look at your biggest money challenges, it would not be surprising to encounter how your reserve funds play a significant role.  This is, in fact, its primary role, help you face life’s challenges. If you lost your job at one point, you would rely on your emergency fund to cover your expenses while you go out and look for work.

That being said, it is a good idea to try and focus on your reserve funds and see if you are able to reach your target for the year. Factor in all the times that you had to use it and add up whatever is left on that fund. You would then have a good idea if you were able to reach your goal. Before the year ends, have an honest assessment of how you managed your reserve funds.

Align your retirement fund with your goals

One of the financial decisions you can make to end the year on the right note is to make sure your retirement fund is still aligned with your long term goals. For one, you can look at how much you have now, how far along you have, and if you are on the right track. You need to make sure that you will be able to retire on your target date.

However, you need to factor in recent changes that happened in your life if any. These are life-changing events such as a new baby, getting a promotion at work, or even getting a significant amount of windfall money. These developments can either speed up your retirement plans or hold you back for a couple more years.

There are a number of financial decisions you can make to help you end the year right. It can be as simple as looking over your budget or even choosing to cut one unnecessary expense in your finances. The important thing is that whatever you decide to do, you need to be consistent about it especially as the new year is just a few days away.