December is about to be over and we are going to enter into a whole new year. How exciting is that? Year end is a great time to plan the upcoming year’s financial goals even if you don’t believe in new year resolutions. It’s a good time to sit with your family and talk about your current income, savings, and debt and how you want to proceed in the next year.

If you are not sure how to approach the financial planning, here are some pointers for you:

Categorize Your Current Finances:

Open an excel file, create categories such as income, debt, and savings and sub categories under each category. Let’s take savings as an example. List down where your money is saved including how much money is in each bank account, investment accounts etc. This excel file becomes an one page portfolio of information once you enter all the details. Once you are done inputting all the information, this excel file can show you your savings % vs Income. This is an essential starting point.

Now that you know your savings %, you should be able to see the areas where you need to tighten up your finances vs where you continue to maintain.

Plan Your Upcoming Year:

Now is the time to discuss upcoming year and life events you are expecting in the coming year. It can be buying a house, planning for kid, moving to a new job, or even putting your kid to daycare/school.

Each of these events will have an impact on your finances both positively and negatively. Also talk about the expected income in the coming year vs expenses. Again, calculate potential savings % based on the numbers.

List Your Priorities & Set Specific Goals:

It’s a no brainer that savings is more important than investment. But without investing, your savings will not grow. So, discussion on how you are going to invest the money is important as well.

For example,

Once you identify the areas you want to focus next year, create a list of things you want to do under each area.

Below are some of the examples:

Action Items and Responsibilities:

Once you identified the areas you want to focus as well as the list of action items you want to complete next year, decide on who is going to do what. Have a timeline within which each of you need to come up with a “plan of action” to achieve your goals. For example, if you want to reduce the grocery spending by 15%, create a plan on how you’re going to do it and share it with your family.

The beauty of this financial planning is, you, as a family, decided on the list of action items and when one of you come up with a “plan of action”, others need to contribute and support you.

Good luck and Happy New Year!!



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