“Autumn is here… time to start thinking about New Year’s financal goals”—said no one ever. However, this may be exactly the right time for you to start planning those financial goals for next year. So even though you may just be settling in from getting the kids back to school, busy with fall sports, and planning for the upcoming holidays, we are going to look at why you should start thinking of your New Year’s finance goals now.
This post has been sponsored by Lexington Law. All opinions are mine alone and are honestly conveyed.
With the holidays coming up, that means extra expenses—parties, dinners, travel, gifts for family, friends, co-workers… and it is the time of year that it is definitely easy to forget about your budget and spend way more than you were planning to. But, by revisiting your financial goals now, you may be able to put things in perspective and avoid the overspending that comes with the holidays—and put yourself on track (or keep yourself there) to reach your finance goals.
What are your financial goals?
What is important to you when it comes to your finances? Are you looking to the future and saving for retirement, paying down credit cards, getting your mortgage paid off, opening a college savings account for your child? Or maybe you have more short-term goals, such as, not using credit as often, getting bills caught up and paid on time, or clearing up your credit? Regardless of what your financial goals are, you need to identify those goals, prioritize them, and put a plan in place to reach them.
Failing to properly plan is probably the biggest reason that so many people fail to follow through with their New Year’s resolutions. We know that approximately 80 to 90 percent of New Year’s resolutions fail—so how can we avoid that?
- Write down your goals
- Break the goals down by week or by month, so they are manageable
- Realize that it will take time to reach your financial goals
How to create a budget
The best way to reach your financial goals for the New Year—or any time—is to start with a budget. A budget will help organize your monthly income and monthly expenses to give you a clear view of your overall financial position. Know where you are and then set the path forward. (Scroll to the bottom to download your free, printable budget!)
This is going to involve talking to your spouse or significant other about money—a potentially very sensitive subject. Before starting this discussion, you may want to read When Not to Talk to Your Spouse About Finances so you can make that conversation as productive as possible.
Why should I assess by financial goals now?
It is estimated that Americans spend about $967 on gifts, decorations, and food around Christmas each year—not including travel expenses for vacations or visiting family during the holidays. We know that travel expenses can really add up for hotels, airline tickets, potentially adding on hundreds or thousands more. And, surprising, over 60 percent of people will use credit cards to pay for their holiday spending! With so many people using credit to pay for their holiday fun, that means that the bills will come due in January, putting your New Year’s financial resolutions in jeopardy of failing before you even get started.
Starting the New Year off by paying down a mountain of debt accumulated from the holidays is probably not the best way to reach your financial goals. So next year, you can have a plan in place from the beginning of the year to deal with the extra Christmas spending, but what should you do if you don’t have a plan in place for this year? Don’t despair. There are still steps to take to avoid overspending this Christmas.
Take an in depth look at holiday spending
Because we are heading into the holidays, there are several extra expenses that may come along that don’t necessarily present throughout the rest of the year: Christmas parties, dinners, travel, buying gifts for family, friends, and co-workers. This time of year is probably the easiest time of year for your finances to go off-track. And if that happens, it will be much harder to actually reach your New Year’s goals. So even if you have a budget in place throughout the year, you should take a closer look at the expenses that you will incur during the holiday season and set a specific budget for that. (Scroll to the bottom of the page to download your free printable budget!)
Some ways to control holiday spending:
- Set spending limits for gifts. Specifically planning this out ahead of time can save you a ton of money! If you see something that someone on your list would like, but it’s over the pre-set limit, then you don’t buy it. It is so easy to rationalize spending in your mind… “well it’s only $20 extra…” but if you do that for everyone on your list, you see just how easy it becomes to be hundreds of dollars over on your budget.
- Use this gift list to track holiday spending (scroll to the bottom to download this Christmas Shopping List for free!)
- Save money throughout the year in a Christmas club savings account. Even if you haven’t been saving all year, you can still set aside some extra money in October and November to help offset the costs that you will incur in December.
- Shop the sales. You really can save money on Black Friday and Cyber Monday. Yes, it takes some time and you may have to battle the crowds on Black Friday, but it will save you money!
- Make homemade gifts. This is fun for the kids and it teaches them that gifting is about giving from the heart, not how much you spend!
- Search for free holiday activities locally. Visit local tourism or community websites to find free events in your area.
- Join a cookie exchange. Many churches or schools organize a Christmas cookie walk (or just organize one with some of your friends)—everyone who wants to participate makes one type of cookie and then each person exchanges cookies, so you come with one type and leave with a several types of cookies! This can save you time from all the baking, and money from having to buy a nice variety!
Download your FREE, printable monthly budget, holiday budget, and Christmas shopping list