As you look back over this past year, did you meet the financial goals and expectations that you set? Perhaps you started the year out like me and had some financial goals in mind. You created a budget, or you planned to build up your emergency savings account. If you fell short of accomplishing your goals, ask yourself why. Be honest with yourself, were your goals specific? Were your timelines realistic? These are questions my husband and I are asking ourselves right now.
Below are 3 steps you can take to review your 2018 finances so that you’re ready to hit the ground running in 2019.
- Review your spending to see what you can cut: This is probably the most time consuming for us but might be one of the most necessary (and potentially painful) steps to take so that you can see where your money actually went (not where you thought you spent it). It’s an eye-opening experience. We knew going into 2018 that we wanted to cut our eating out spending habit. We downloaded our eStatements, broke each expense up into categories (eating out, groceries, gas, entertainment, utilities, etc.), and then tallied up each of those categories. What we found out was that we’re still spending WAY too much money eating out. Moving into 2019, we’ve decided to give ourselves a certain dollar amount each month to spend on eating out and we’re going to challenge ourselves to not go over that amount.
- Review your savings account to see if you reached your savings goal for the year: We set a goal to open a new, separate savings account that gives us access to our money, if needed, but also grows our savings with automatic deposits each month. We use our High Yield Online Savings Account as an emergency savings account. We could get to our funds, but we don’t transfer money out if it all of the time. It’s truly an emergency fund and we only dip into it for emergencies. We decided that in 2018 we were on the right track for saving but moving into 2019 we’re going to allocate more money to this account.
- Review your credit report and credit score: This is an important one for us. We are a young couple who are looking to start a family soon, so we know that big purchases are in our future. Therefore, our credit reports need to be up to par and our scores need to be ideal for our future plans. I use CreditKarma to check both Eric and I’s credit reports and scores often. It’s easy to use and you can look at it whenever you want to without affecting your credit score.
Knowing how you spent your money, how much money you saved, and knowing your credit scores are some great tools to use when looking to move forward into the new year. We know we may have fallen short on our spending goal in 2018, but 2019 is a new year and we have a new budget to continue to improve our finances.