Planning for the New Year
I know it’s only October, but the new year will be here before we know it. After all, look at how this year has been flying by! With that said, here are just a couple of things you should do to prepare your finances for the rest of this year and for the new year just around the corner.
Plan Ahead for the Holidays
Between now and the new year there will be lots of situations that arise where you will be tempted to over-spend, ignore your budget, or where you’ll want to say “the hell with budgeting, I’m buying the flat screen”, or is that just me (on Black Friday)? 🙂
Halloween, Thanksgiving, Black Friday, Christmas, and New Years are all pretty spendy holidays. Now is the time to get your budget in order and make sure you’ve planned ahead with some cushion to cover additional expenses that will come up this time of year. It’s better to budget for them now and have extra money leftover than to give in to the thinking that you will just avoid all these “extras” and end up blowing your budget big-time with holiday expenses. Gift giving, extra holiday food for gatherings, and maybe even a new holiday party outfit are all things to consider budgeting for in the next couple months. Are they all necessary things? No, but like I said it’s better to budget for them and not spend anything than not budget and spend a lot. Set aside some time to review your holiday plans, make gift giving lists, and meal plans for the upcoming holidays. Don’t forget charitable giving in your holiday budget. (I’ll be talking more about this soon!)
Review Your Progress and Set New Goals
Part of preparing for the new year is reviewing the progress you’ve made toward your goals – financial and otherwise – throughout this year. Measuring your progress in 2014 will help you set realistic goals right off the bat for 2015. For me, 2014 was the first year I set any real financial goals, like how much debt I wanted to pay off and how much money I wanted to have in savings, and I just made a blind shot in the dark. Now that I’ve been through almost a whole year and I’ve been tracking my progress, I now know how to set more realistic goals starting off in 2015. This should help me as I (hopefully) won’t have to adjust them (at least not as much) throughout the year.
Part of planning and setting goals for the new year is estimating how much your salary will be after any year-end raises or 401K contribution changes. Personally, I’m anticipating a small raise and I’m hoping to increase my 401K contributions by 1%/pay period. I never want to count my chickens before they’ve hatched, but I do want to be prepared for how I’m going to use any income increase I may receive, so I’ve created a projected budget using my anticipated new take home salary for the new year. Of course, I will make changes to my projected budget as the new year gets closer and I find out a definite number for my new take home pay.
In addition to having a plan for any raise I may get, I also have a plan in place for how I’m going to use my year-end bonus (which is actually paid out Feb 1st). I try to realistically predict how much this lump-sum payment will be, but I am careful not to spend it before I even have it in hand.
What else do you do to help plan for the new year?
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