Settling Year-End Personal Finances: How a Checklist Can Help

Revelers across the nation and the world will soon be ushering in a new year. Sure enough, 2019 is just around the corner. While everyone's entitled to a little bit of partying when the clock strikes midnight, it's important consumers not neglect some important personal finance management before the new year begins.

Having a plan for your personal finances set out before the next 12 months arrives is essential. Lots of people make new year's resolutions to get in physical shape, so why not make the same commitment to toning up your financial well-being? You may find that gym membership could create a hole in your monthly budget that needs offsetting in other areas of spend. 

Regardless, sitting down to review your finances for the past year and how the next year will stack up can help consumers more effectively meet their financial goals and obligations. Still, it can be hard to take that time during the holiday season. So here's a basic new year's financial checklist to get you started:

Item #1: Examine previous year spending

How well did you stick to your budget in 2018? Did you even have a budget at all? These are questions to ask when you get around to planning your 2019 personal finances, as your performance in the year before will illuminate spending habits you may need to nip or strengthen. You may not have to go line by line through all 365 days, but you can generally get a good feeling for your spending from bank statements, payment app histories and memory. 

Look at how much you spent on takeout, or retail splurges; also look at where you saved or came in under budget, like home essentials or subscriptions. Taking all these factors into account will help you devise the ideal 2019 plan.

Item #2: Carve out retirement and other savings

Focusing on savings is another part of optimizing your 2019 budget. Not only must you look at how you spend, but also how you save — particularly for retirement. It's never too early to start putting away for retirement, and if anything there's added urgency to do so in light of less-than-encouraging savings activity  by Americans. 

When you start with your income and subtract expenses like grocery and utility bills, remember to also deduct expected savings contributions, whether you have a 401(k), an IRA or an alternative retirement account. Representing savings as part of your budget allows you to more accurately grasp what you can contribute and how that segment affects your budget overall.

Item #3: Spotlight taxes and debt

Addressing taxes and debt also shapes a comprehensive 2019 financial plan. April will creep up sooner than you expect, so it's important to prepare tax documents or strategies you will need before the 11th hour. Having a framework for managing or paying down debt at the least grants consumers greater oversight of their credit, if not helps them get ahead in settling accounts.

Understanding your personal finances is central to crafting a budget. If you're in need of information or assistance, representatives online or at your local Vectra Bank branch can help. Contact us today.

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