Financial Checklist For The End Of The Year

Financial Checkllist for the End of the Year

2020 has been a crazy year for many of us because of COVID-19 and the election. I am sure you, like me, are happy the year is almost over. My favorite part of the year is the little lull that happens after Christmas. I have a side business that is super busy until the holidays, and then all is quiet until late-January. I relish this downtime because it is a perfect opportunity to reflect on the past year, personally and financially. After a busy holiday season, it offers me the time to get my financial house in order. I catch up on bookkeeping, collect my financial information for tax season, and set goals for the next year. I have an end of the year financial checklist I run through. You should too! It is essential after the uncertainty of 2020.

What to Review for Your Financial Checklist for End of the Year?

Start with the Basics

Smart Budget. Review and update your budget. Has anything changed in your life that required a change in spending?  If you have no idea of how much you are currently spending, the start of the New Year is a great time to get a handle on it. There are many tools for tracking your spending. Even a simple notebook will suffice. Any month you spend less than budgeted, transfer the difference into savings or pay down debt.

Debt. A smart budget will include all your debt: credit cards, mortgage, car loans, student loans, etc. Make 2021 the year your pay down your debt, which will free up money for investment. Consider what kind of approach will work best for tackling your debt. Review your budget to determine how much money you can apply above the minimum payments. Then, set a deadline for paying off your debts one by one. Even adding a small amount can help. As you pay off debts, apply that “extra” money towards another account or put it in your emergency fund. I was able to pay off student loans early by having a side gig and applying the money that wasn’t part of my budget towards the loans.

Emergency Fund. Most of 2020 has felt like an emergency! Although we were fortunate to stay employed, this year has made us examine our emergency fund. We chose to increase the amount of money we had in it. You should have at least six months of expenses set aside in case of a loss of income. Unemployment payments usually don’t start right away. You should have enough money set aside to deal with a financial emergency or several months without pay. If you had to tap into your emergency fund this year, add that money back to the account in 2021.

Credit Report. Have you checked your credit report lately? If you answered no, check to make sure that everything’s how it should be. Checking your report is a great way to spot identity theft or errors. Errors do happen! An accurate report is essential when applying for a loan, renting an apartment, or even changing insurance companies. Good credit was the reason we saved so much money on our insurance. You can get a free credit report annually at

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Disclaimer: Dividend Power is not a licensed or registered investment adviser or broker/dealer. We are not providing you with individual investment advice on this site. Please consult with ...

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