Article by: Christine D.Roberts-Kelly,MBA CEO
Contributing Writer

As the year winds down, it’s a good idea to conduct a financial checkup to determine how healthy your finances are and how you can improve them in the coming year. In the same way, you should schedule a yearly physical; you should also examine your financial health regularly.

Having a healthy bank balance is just one component of financial well-being. It’s also about being confident and calm about your financial future since you know you’ve got everything under control. When your financial situation is stable, it gives you peace of mind, and makes planning for the future seem doable.

The first step in every financial checkup is to complete an assessment of all your spending over the previous three months to one year. Have your expenses aligned with your financial targets and objectives? Spending hot spots are sometimes found in unexpected places like eating out, entertainment, shopping, subscriptions, and impulsive buys, so examining bank and credit card accounts for signs of overspending is essential. Seeing exactly how your money is spent might provide the information you need to get your finances back on track.

The next step is to set concrete, and attainable, monetary goals for the next quarter or year. Create specific, measurable, achievable, relevant, and timely (S.M.A.R.T.) targets for debt reduction, retirement, emergency savings, and other important endeavors. Review your progress toward the objectives you established at the beginning of the year and decide whether any revisions are needed. Maintain a clear commitment to your financial health while allowing for unanticipated twists and turns.

So, let’s create a plan to help you reach those goals! One that not only focuses on your needs but also your wants!
Using a conscious spending strategy can help you create a long-term spending plan that allows you to reach your financial objectives and not feel overwhelmed in the process. An example of the conscious spending strategy is creating a 50/30/20 plan. This plan suggests spending half of your take-home pay on necessities like food, shelter, and transportation. Put 20% toward paying off debt, savings, and long-term goals. While the remaining 30% goes to wants. Those expenditures that we usually feel guilty about… entertainment, vacation, and our coffee fixes. With a plan in place, you’ll be more conscious of where your money is going and less likely to feel guilty when you spend it. The theory behind this is to not make a plan so strict that it’ll force you to do without. Make room in your budget for fun and indulgent purchases here and there so you don’t feel deprived. Harmony is essential.

After setting clear goals and establishing a conscious spending plan, it’s time to evaluate your current financial situation.
Subtract your debts from your assets to get your net worth. Your financial well-being may be summarized in a single figure. Your net worth should rise as you reduce your debts and build up your assets like real estate and retirement funds and investments. Monitor this frequently to see how far you’ve come in strengthening your financial position.

With a clear understanding of your current financial situation and well-defined goals, it’s time to take measures to ensure a successful year-end and a surge of financial momentum into the new year:

❖ Accelerate debt repayment by allocating bonuses, tax refunds or other windfalls.
❖ Increase retirement contributions to maximize employer-match benefits.
❖ Build an emergency fund to cover 6-12 months of living expenses.
❖ Trim discretionary spending by 10% and redirect those dollars to hit goals.
❖ Seek financial education like personal finance books or podcasts.
❖ Meet with a fee-only financial advisor to optimize your money situation.
❖ Automate payments and transfers so positive money habits become effortless.

Achieving financial wellbeing is a journey fraught with ups and downs that lasts a lifetime. Don’t be hard on yourself or let momentary failures deter you. You may compensate for lost time if you treat yourself kindly and keep at it. In the face of adversity, take a deep breath and remind yourself that this will pass. Use your emergency fund to help you get by until you can get back on track financially. Think of difficulties as opportunities to start over financially.

So, as the year draws to a close, use financial check-ups and mindful spending habits as guideposts.
If you consistently pay positive attention to your financial health, you’ll be in good shape no matter what the year brings. The road ahead may be long, but the building blocks of financial wellness covered in the article should help you deftly conquer new obstacles.