Image of a woman counting singles as she does her end of the year budget review and begins planning for the new year. Photo by Alexander Grey via Unsplash.

End of the Year Budget Review and Planning for the New Year

How to hit the ground running for the new year!

They say if you don’t know where you’re coming from, you won’t know where you’re going. Truer words were never said, especially for finances. This is why an end of the year budget review is so important and a key factor for planning for the new year. Let’s take a look at what you need to do to go into the new year with some financial momentum!

How to Do Your End of the Year Budget Review

GIF of Homer Simpson struggling to review books for work. A panic that many feel when doing an end of the year budget review.

We know we have to review our budget, but how exactly do we go about it?

Gather Your Financial Information

Here is where you establish your current state. Grab your income statements, bank statements, credit card statements, and investment account statements. Once you have it all together, you can clearly see where you stand in order to decide where you want to go.

Review Your Spending

When it comes to an end of the year budget review, it’s pretty obvious that you’ll need to review something. Are there any places you can cut back? Maybe there are things you’ve spent money on that no longer align with your financial or personal goals. Once you’re done reviewing, you’ll have a clearer picture of what moves you can make to get you and your money on the same page.

How to Begin Planning for the New Year

You could fumble through the year, fingers crossed that you’ll end up where you want to be. However, it will be far more efficient to set up a game plan to guide you to your end goal. Let’s see how you can go about doing that.

Set SMART Financial Goals

You’ll want to choose goals that are (s)pecific, (m)easurable, (a)chievable, (r)elevant, and (t)ime-bound (see what they did there). For example, while saving more money sounds like a solid goal, it would be better to aim to save $500 by June. It is far more feasible to achieve a goal when you can see the light at the end of the tunnel.

Create A Budget

Now that you know what you want to accomplish, your budget will help you get there. By tracking your income and expenses, you’ll be sure you’re on the right track for meeting, or even exceeding, your goals. Once you’ve created a budget that works for you, make sure you stick to it. You don’t want to come out the gates killing it only to fall off the path because you stop doing what got you this far.

Bonus Tip: Review Your Budget And Goals Regularly

This is your life and your money. Don’t take the set it and forget it approach. Make sure to review your budget and goals as life goes on. Maybe you get a raise and need to adjust accordingly to prevent lifestyle creep. You may get a surprise windfall of money that can help you achieve some of your short-term goals faster. If you don’t adjust for these types of changes in your financial situation, you’ll be likely to fall back into bad habits that will derail your future financial success.

The Wrap Up

Although you should be reviewing and adjusting your budget throughout the year, it is especially important to do an end of the year budget review. The holidays can throw everything into disarray, and this is a great way to mitigate the financial damage travel and gifts may do.

When it comes to planning for the new year, make sure to give yourself some grace. Make your goals realistic. You don’t want to burn yourself out before you even get started. Also, be sure to track your progress. How can you celebrate your wins and milestones when you’re not paying attention to them? It can all feel like a lot, but there’s nothing to it, but to do it. You got this and we got you!

Headshot picture of the writer of this article, Kenneth Medford III, with a muted black and white filter.
Kenneth Medford III

Writer, rhymer, gamer: the easiest way to define the man known as Kenneth Medford. I’m a simple man who loves to learn and loves to help and I wander the digital world trying to find ways to sate my hunger for both. Basically, I’m Galactus but helpful.

Check out my other work here or reach out to me on LinkedIn.

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