Year End Review: Reflect, Strategize, & Achieve
The end of the year is a perfect time to pause, reflect, and prepare. With just a few weeks left in the year, you may want to conduct a year-end review to benchmark your achievements during the year and identify areas for improvement in the new year. Let’s discuss some December planning items to consider and why goal setting now for 2025 can be impactful for you and your finances heading into the new year.
First, take stock of your financial journey over the past year. Review your progress toward savings and investment goals, assess how your spending aligned with your budget, and evaluate how you managed any unexpected expenses. With any upcoming holiday spending or travel, you may want to factor a higher spend into your average monthly budget so you don’t feel the higher bills come January.
If you’re receiving a year-end bonus, consider how to make the most of it, whether its adding to your emergency fund, replenishing your checking account due to excess holiday spending, adding final contributions to your retirement account, or other investments. Or you may want to tackle high-interest rate debt you’ve been carrying all year. It’s also important to enjoy your hard work—set aside a small portion of your bonus for personal enjoyment while keeping the majority aligned with your financial goals. Be mindful of taxes, as bonuses are often taxed at a higher rate, and consult with a financial professional to ensure your strategy is tax-efficient.
New Year’s resolutions are most effective when they are specific, measurable, and realistic. Consider goals like increasing your savings rate, updating your estate plan if you’ve experienced major life changes, diversifying your investments, or sticking to a set spending plan and budget. Commit to regular check-ins throughout the year to track progress and make adjustments as needed, ensuring that your resolutions stay relevant and attainable.
Declutter your financial accounts by closing unused ones and consolidating investments where appropriate. Automate your finances using a financial software or aggregation tool to help keep track of your overall net worth. Reassess your insurance coverage to ensure it aligns with your current needs and circumstances. Finally, create a financial calendar that highlights key dates for taxes, investment contributions, and bill payments, helping you stay organized and proactive in the year ahead.
The year’s end is both a finish line and a starting block. By reflecting on the past, benchmarking your 2024 financial success, and setting meaningful resolutions for 2025, you can step into the new year with clarity and confidence. If you do not already, consider engaging with a financial advisor to tailor and customize financial strategies to your unique goals and situation. Email info@shermanwealth.com with any questions or schedule a complimentary intro call to learn more about your year end review here!