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8 Steps For Financial Success in the New Year

8 Steps For Financial Success in the New Year

As we enter a new year, it is important to reflect on our financial habits and make changes that can lead us towards financial success. Here are some practical steps you can take to amplify your financial life in the coming year.

1. Block out time on your calendar to review your finances 

  • If you have a partner, be sure to coordinate with them first so that you will be on the same page with the finances. 
  • Make it a habit to review your finances monthly or quarterly, however checking in annually is certainly better than not reviewing them at all. Think of your check-ins as financial maintenance, like scheduling your car for a routine oil change. 
  • So go ahead and schedule those routine financial check-ins on your calendar before you forget!

2. Consider consulting with a financial planner

  • A financial planner can help you assess your financial health, taking into account the previous year's income, expenses, savings, and investments. This assessment is fundamental in setting realistic financial goals for the new year.
  • Considering the unpredictable nature of financial markets, having a professional can provide insights into potential risks and opportunities.
  • A financial planner can also help you strategize tax planning, ensuring you're maximizing deductions and credits for the upcoming year.
  • A financial planner does not only help with retirement planning, but assists with other important things, like job transitions, by helping you navigate rolling over your 401k, for example.
  • Consider the benefits of having a professional help you manage your finances, such as the time it could save, and the tax savings it could potentially bring.

3. Review your current budget & revise accordingly

  • There are a bunch of great online budgeting apps (Honeydue, Mint) that can help you manage your budget by syncing your checking and savings accounts, in addition to credit cards, loans, and other investments. 
  • Or if you prefer, you can do it the old school way by listing all of your sources income and expenses in a spreadsheet.

4. Set realistic goals & implement strategies

  • You (and your partner) should make a list of realistic, attainable  goals for the year.
    • These goals should be specific, measurable, achievable, relevant and time-bound (SMART).
    • By setting clear and attainable financial goals for the year, you can create a roadmap to follow and track your progress.
  • Prioritize paying off any outstanding debts, especially high-interest ones (like credit cards).
    • Consider using the debt avalanche method, where you focus on paying off the debt with the highest interest rate first, to save money in the long run. 
  • Next to each goal, write down the next step to take in order to achieve each goal.
    • Often these action items involve researching the answer to a simple question, or having a conversation with a trusted professional. 
  •  Then schedule your action items on your calendar right away (don't wait, or you'll forget!)  

5. Review savings & investment accounts

  • Evaluate your past year's financial performance. Recognize your successes and identify areas where growth was underestimated.
  • Review your list of financial goals. Are they still the same, or have changes occurred in your life that warrant a shift in direction?
  • Revisit your risk tolerance. As market conditions fluctuate, it's important to ensure that your investment portfolio aligns with your comfort level for risk.
  • Consider if you need to rebalance your portfolio. If certain investments have performed well, they might now represent a larger portion of your portfolio than planned, potentially exposing you to unintended risk. Regular rebalancing can help maintain the desired level of diversification.
  • Remember to consult with a financial advisor before making any significant decisions.

6. Review your insurance policies

  • Remember, insurance planning is an essential aspect of overall financial planning.
  • Make sure to review your current insurance coverage and consider any updates or changes needed for the new year. This can include increasing coverage, changing providers or adding new policies. 

7. Continuously educate yourself 

8. Practice discipline and consistency

  • Achieving financial success requires consistent effort and discipline.
  • Stay focused by regularly reading over your list of financial goals.  
  • Stick to your budget.
  • Schedule everything on your calendar, from your monthly check-ins to your next steps/action items. 
  • Stay accountable and take radical responsibility! 

Questions and/or interested in how this applies to your financial life?

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