Time to read: 6 min

Some people start off the new year with promises to eat healthier or learn a new language, while others commit to moving to a new city, starting a business, or finally purchasing their dream home. It’s only natural that the mark of a new year has people thinking seriously about the next chapter of their lives and what they want to accomplish.

It’s also the perfect time to set yourself up for a successful financial year – and doing so will likely go a long way in helping you achieve your other goals.

There are a few easy steps you can take at the start of the new year to make sure you, and your money, are primed for a successful year.

Determine Your Goals.

Arguably the most important part of determining how to structure your finances is figuring out what your money is for. Somebody who’s primary goal is saving for retirement will benefit from different strategies than a family hoping to purchase a home or pay for their children’s educations. Goal based financial planning prioritizes what matters to you – but it only works if you’ve taken the time to determine what exactly your goals are.

The beginning of the year is the perfect time to consider not only what your long-term financial goals are, but what you want to achieve throughout the year. Perhaps it’s purchasing a new car or saving money for a luxury vacation. Maybe you want to finish paying off student loans or your mortgage. Setting realistic short-term goals will help you determine not just what you should do in the long run, but help you take actionable steps today.

Revisit Your Budget.

Your regular expenses and income likely change regularly – and your budget should reflect that. At the beginning of the year, review your budget and make sure it still represents your current financial situation. Have any of your expenses gone up? Has a loan been paid off that no longer needs to be accounted for? Did you or your spouse get a raise at work?

Having an up-to-date picture of your finances will help you figure out if there’s a place you could be saving or investing more.

Work to Eliminate Debt.

While being completely debt free is a great goal to have, we’re not referring to mortgages or low interest loans on investment assets. However, high-yield interest loans on use assets does nothing to benefit you in the long or short term. If you have credit card debt or other loans, make paying them off a priority.

Build or Add to Your Emergency Fund.

In an ideal world, everybody would have an emergency fund with enough money to cover 3-6 months of living expenses. However, once people reach that threshold, they often forget about their emergency fund, unless they need to use it.

Of course, living expenses change over time, so if you haven’t looked at or contributed to your emergency fund recently, it’s a good idea to check in and assess if the right amount is saved.

Learn About Tax Advantages You May Be Missing Our On.

If you’re a high-income earner, you’re also in a high tax bracket – but there may be opportunities to reduce your tax burden. From deferred compensation to HSA contributions, there are more tax breaks than you may realize, and restructuring your finances may have a big impact on your long-term financial situation.

Prepare for the Unexpected.

You may experience a financial setback over the next year. You also may have a windfall. Even the most thorough and secure financial plans can’t anticipate everything life will throw your way. Remember that flexibility is important and that you can always adjust your plans when needed.

Meet with a Financial Advisor.

Starting off the new year on the right financial foot can be easier said than done and knowing how to make the most of your unique financial situation while prioritizing your goals can be daunting. A financial advisor can help you make sure the decisions you’re making will help you achieve your short- and long-term goals and set you up for a successful future.

Times of transition, like the beginning of the new year, are the perfect opportunities to make sure your finances are healthy, your goals are prioritized, and that you’re well-prepared for the future.

This blog is for informational purposes. Certain information contained herein (including any forward-looking statements and economic and market information) has been obtained from published sources and/or prepared by third parties and in certain cases has not been updated through the date hereof. While such sources are believed to be reliable, The Tranel Group does not assume any responsibility for the accuracy or completeness of such information. The Tranel Group does not undertake any obligation to update the information contained herein as of any future date.