Now that the new year is approaching and 2012 is winding to a close, it’s a good time to evaluate your 2012 financial goals. As you sit at home alongside the unwrapped gifts, the warm fireplace (or heater), and the refrigerator full of leftovers, take a moment to contemplate how this past year went for you in terms of your finances.
Did you make any specific resolutions or goals last January? Or perhaps you didn’t write any down but in the back of your mind you’ve been working to improve your financial standing this year.
Either way, here are some tips I would recommend for evaluating your financial year:
Make a list of the things you did well
Before you judge yourself on the results you achieved, first look back and remember all the things you did well – that helped your finances this year. Things like changing your shopping habits, tracking your spending, or even just small moments like when you decided to buy a TV on Craigslist instead of putting a brand new one on your credit card.
When you focus on the positive, concrete actions you took this year you will feel encouraged to continue with similar decisions and behaviors in the coming year. Believe it or not, congratulating yourself along the way is a crucial step toward successfully accomplishing your goals.
Evaluate your financial foundation
Is your home’s foundation stable? It better be – because you need it to keep your house and your family safe. And in the same way, your finances need a solid foundation to keep you safe. That foundation must include:
– Budgeting (so you know where your money goes each month)
– Paying off debt (to get you closer to financial independence)
– Saving (to protect you in case of emergencies)
– And no dangerous financial habits (like a shopping addiction)
Now that it’s the end of the year, be accountable to yourself: did you have a good financial foundation in 2012? If so, then there is a good chance you were able to meet your goals for the year. If not, then you may have struggled to reach those goals. Either way, seeing what you did well and what you need to improve will help you in 2013.
On that note…
Focus on what can be improved
Now that you’ve congratulated yourself for the things you did well and examined your financial foundation, you should look closely at the things you can improve on in the new year. For some, it may be little things like switching from Starbucks to home-brewed coffee (or bringing your lunch from home). For others, it may be more drastic changes, like cutting up credit cards or getting out of an upside down car loan.
Identifying the things that we can improve on will put us on the right path for starting out the New Year. In fact, you should write down your top goal and make it a resolution or promise or commitment (whichever term you like best) for 2013. Draw a picture next to it or paste it onto a colorful piece of paper and then put it somewhere you are sure to see it frequently. Now you’ll be set for starting the new year on the right foot. And remember, use the things your successes from 2012 – whatever they may be – to motivate you.
And as always, we’ll be here to help!
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