New Year’s Financial Checklist
The new year symbolizes a fresh start. It’s the perfect time to review your financial expectations for the months ahead. Let’s take a look at some of the important money topics to review.
1. Ch-ch-ch-changes
Think about your experiences last year. Did you have any major life changes? Getting married, changing jobs, having a baby, adopting a child, or taking on a dependent are all changes that impact your financial well-being. Other major changes include moving to a new residence and taking on high-dollar expenses like student loans, medical bills, or a new car payment. If you anticipate these life changes in 2022, you need to make changes in your budget now.
2. Budget Review
Even if you did not have a major life events last year, you still need to look at your budget. Perhaps your saving goals should change in 2022. Don’t forget, a budget should be fluid. If you paid off a loan or debt last year, you have some money freed up. Be sure to allocate that to fit your changing needs. Remember to include your emergency savings of at least $1,000. If you are in the position to do so, setting a saving goal of three to six months of expenses is a great way to stay on top of any unexpected financial setbacks. You can read more about household budgeting tips and saving goals in my post, “A Deep Dive into Household Budgeting – Part One”.
3. Taxes
With COVID relief efforts flowing into millions of households in 2021, it is no surprise that there may be tax implications. Between the Child Tax Credit advance, the federal Economic Impact Aid (stimulus checks), student loan repayment pause, and local aid, taxpayers may be in for a surprise when April 15th rolls around. Be sure to speak to your tax professional and financial counselor to prepare for the impact of these efforts.
4. Don’t wait ‘til the last minute
Start early and don’t procrastinate!
5. 401(k) Contributions
COVID relief aside, you may need to tweak your withholdings and 401(k) contributions when factoring in cost-of-living raises, bonuses, and changes to your household income. Remember, if your employer offers a 401(k) match, take advantage of that! Match them dollar for dollar to reap the rewards. If you can do more, great, but don’t leave free money on the table.
6. Insurance
Have you had the same insurance coverage for as long as you can remember? Now is the time to compare companies and coverages. What worked for you last year, may not be the best solution for you in 2022. Shopping around for deals can save you money and improve your position if you should ever need to file a claim.
7. Recurring Bills and Subscriptions
While you are at it, take the opportunity to review your subscriptions and recurring bills for a chance to save. This includes the cable company and your cell phones. Call the companies if necessary to see if they can offer you a discount. Don’t be afraid to cancel, either. No one needs cable anymore when there are streaming services available. Bonus – you can fast forward through the commercials! :)
Be sure to avoid early termination fees.
8. Retirement
Is 2022 your year to retire from the workforce? Maybe you just want to check your goals so you can stay on track for retiring a few years from now. Maybe you plan to leave the career force and take on passion projects or a part-time job to stave off boredom. Whatever situation you find yourself in, a good budget review can help make sure you are where you need to be before you leave your workplace for the last time. You want to ensure that your budget allows you to do what you dream of in your golden years.
9. Estate Planning
No one lives forever. Be sure to review your will at least annually to make sure that the plan meets your current intentions. It never hurts to sit down and discuss your plans with an attorney. Even though wills can be found online, it may be a risk that you don’t want to take. Remember to address your living will, durable power of attorney, and healthcare directive during this review. Unfortunately, you will not always be able to allocate your assets or indicate your wishes in the moment, so addressing these items upfront while you can will save your family members the stress of guessing what you might have wanted.
10. Don’t forget your pets
When you are planning for retirement, estate preparations, or simply adding a furry friend to your family, be sure to make accommodations for them. Pets are expensive and require food, medical care, and lifelong shelter. Whatever stage you are in your life, be sure you add this expense to your budget.
What topics are in your budget review checklist? I want to hear from you. Leave a comment below or email me.
Krista Kyte is a personal finance blogger and personal banker with over 18 years of experience in the financial industry. Krista is passionate about helping our members understand their financial situations. She writes tips that help consumers reach and maintain financial security and start living the life they’ve always wanted.
