3 Big Tips: Financial Planning for the End of the Year

Well friends, we’ve almost made it another year! As the calendars flip over to December, we wanted to share a few tips to help close out 2019 and welcome the new year with a happy and healthy financial lifestyle.

Wrap Up Your Taxes on Time!

Over the next few months, you’ll receive all of the paperwork you need to file your 2019 tax return. We can’t emphasize how important it is to stay on top of this while it’s happening. Every time you receive a form related to your 2019 tax return, act on it right away. It’s easy to let this stuff pile up, get lost, or otherwise fall off your radar. When that happens, it adds to the stress and general panic of the April 15 deadline. Wouldn’t you rather just have all that buttoned up so you can relax in the spring?

Starting in January, keep an eye out for your W-2, 1099 forms, and any other tax paperwork that arrives via physical mail. Also be on the lookout for any forms that come electronically. If you’re not sure exactly what forms you’ll need, now is a great time to set up an appointment with an accountant and get ahead of the busy season.

Budget for the Holidays

The time from November through January is packed with holidays. No matter where you live or what religion you practice (even if it’s none at all) there’s a pretty high likelihood that you’ll be spending some extra money celebrating during this time of year. 

The key here is not to get swept up in the celebrations, or at least not financially. We highly recommend creating and following a budget all year long, and the holiday season is no exception. It can be easy to go a little over on gifts, or meals, or drinks, or any of the other easy-to-find temptations during this time of year. 

But here’s where your financial discipline and willpower come into play. These traits might be hard to muster if you’re not used to sticking to a budget, so here’s a little tip for you: 

  • If you already have holiday spending accounted for in your budget, great! Just stick to it!
  • If you don’t have a holiday budget, take a look at your finances and determine what you would like to spend. Take out that money as cash from the bank, and put it someplace safe. Only use that cash for holiday-related expenses; once it’s gone, so is your extra holiday spending.

Plan for 2020

To piggyback on our recommendation of keeping a budget year round, this is the right time to review and adjust your budgetary plans for the new year. If you already keep a budget (and if so, good for you!) we recommend sitting down and seeing how well you did with sticking to your budget this year. It’s important to approach this without a sense of judgement—if you went over your budget, you need to honestly assess whether it’s your budget or your behavior that needs to change. And you can’t make that assessment unless you approach the whole process from a calm and rationale position.

If you don’t already follow a budget, why not start? Modern software tools like Mint make it easier than ever to look at your spending trends and create a plan. We believe that the best budgets should fit your reality, and therefore shouldn’t take a lot of personal responsibility to follow. 

The goal of a budget isn’t necessarily to change your spending habits, it’s to reinforce the good habits you have. For example, if your current lifestyle involves eating at restaurants most nights then your budget should account for that, not take it away. It’s just that a budget should help you realize if you’re spending more at those restaurants than usual. You’ll be surprised at the overall financial impact it makes to simply plan for your expenses, and stick to your plan.

And remember—if you need help setting up a budget, or want to dig deeper into planning for your unique financial situation, we’re always happy to help!