By: Kayleigh Yerdon
With the end of the calendar year steadily approaching, we all know that things can get a little chaotic in terms of our personal finances. Many people – even those who have really stuck to their budgets all year long – find it difficult to manage their finances in the most efficient ways as the year comes to a close. And, when we think about the circumstances, we find that it’s pretty normal to feel financial pressure at the year’s end. Consider, for example, things such as the holiday season, end of year bonuses, and winter travel. These are all things that come to a head in December and can make us feel like our bank accounts are fluctuating like crazy – just a little nerve wracking. Next, add next year’s plans and budgeting into the mix and we realize that there can definitely be a lot to think about at this time.
Without some proper planning, then, you might feel like you’re finishing 2016 by putting hole in your financial boat, and potentially setting yourself up to drown in 2017. But, don’t panic just yet, investors – there will be no drowning here! With a little thought and some proper planning, you might just realize that you don’t have to take an end-of-year deficit and that your financial boat can stay happily afloat as the new year starts. To get your planning started, here are some of our best tips for you to finish 2016 strong and set yourself up for a solid 2017:
1. Plan for the holidays.
We know this one seems like a broken record at this point. But, so many people go into each holiday season and spend way more than they intend to. To avoid this, you might consider thinking about ways to save during the holidays. Maybe set gift-spending limits with your family, make gifts or decorations by hand, and try to think about whom you’re really shopping for when you go gift shopping (remember: it’s probably not you, even though you really like that new sweater you got for your sister). Overall, you’ve probably heard this advice so many times because it might actually work – give it a shot!
2. Think about your end of year bonus.
The end of the calendar year is when companies typically give their employees raises or bonuses. If you could be expecting either one of these pay increases, think about what you want to do with that extra money. Before you book a fancy vacation or treat yourself to something big, make sure you have all your boxes checked – are you still on budget for 2016? Have you done all of your holiday shopping within your budget limits? What was your saving goal for this year and have you met that? A little unexpected money in your pocket can be really great, but make sure you handle it wisely!
3. Consider your emergency fund.
How has your emergency fund held up in the past year? If you didn’t use it, that’s great! You might consider simply maintaining it or slightly reducing its size. If you did dip out of the emergency fund a little bit in the past year, remember that’s okay. But, you should consider replenishing this fund before 2017 starts!
4. Plan your winter travel early
Winter is here! After the holidays, many of us will go back to work or school and dream of the perfect (hopefully warm) vacation spot for a getaway. That’s great, of course, except for we know that the end of February through early April – the typical “winter travel” or spring break weeks – are notoriously some of the worst days to fly. So, to avoid surge prices for your winter travel, you might consider booking your getaways ASAP.
5. Start thinking about tax season
Less fun that the vacation thing, we know; but, a valid point all the same. Most people typically don’t think about their taxes until the spring, but by waiting, you could actually be missing opportunities to both give and save! Donations over the holiday season – such as to the Salvation Army or local shelters – are really popular, helpful to so many, and can be recorded as tax deductions for next year. Further, any donations to your personal 401(k) or IRA (up to yearly limits for 2016) can lower your taxable income, while you save money for the future. With a little extra planning for your taxes, you can save more than you think!
6. Establish your goals for 2017
Start making your financial New Year’s resolutions! What do you want to achieve by the end of 2017? Maybe you want to buy a car, take a trip, restructure your investment portfolio, or see X amount of dollars put away into your bank account. Whatever your goals are, record them now so you can budget for the upcoming year. By creating a plan and a budget early, you can become more financially prepared for the year to come.
With these tips and a little self-planning, you can help your finances stay on track through the end of 2016. Of course, this kind of early planning can help you start 2017 on the right foot, too. The finish line is just ahead of us, investors; let’s make these last few weeks count!