Is a fall cleanup of your finances in order

10/07/2021

The best way to have a better year financially in 2022 is to start identifying and cleaning up your money matters this Fall. Our best chance for improving our financial situation next year really depends on ending 2021 by making smart financial choices. Read further to learn what you should be doing this fall.
 
Why is it so important to work on your finances last few months of the year, a fall cleanup per se?
A great comparison to consider is that if you want to have a great landscape for your house next year, your actions in the Fall are more important than those in the Spring. It is the same with your financial situation. Having a Fall financial cleanup is the best way to make sure that you can start the New Year off with a better financial plan. When we are struggling with money, the fixes are not typically something that can be corrected in a week or two. Taking the entire last quarter of the year to resolve any problems means you can start your next year on solid footing and improve the chances of having financial success in the coming year.
 
What should a Fall cleanup of your financial situation involve?
It should start with a quick assessment of your financial situation. This includes a:  review your outstanding balances on loans; determination if your emergency funds and vocational freedom funds are sufficient; obtain a credit report to look for errors; and finally review some of your major expenses to look for savings. Some of the most common issues that people will find include: discovering that your overall debt has remained the same or increased even while paying extra; that their emergency fund has been further depleted rather than grown; perhaps that their credit has declined; and finally, that they are overpaying for expenses such as insurance or utilities. From this assessment it is much easier to build an action plan for improvement. Much like most people assess their landscaping success to date and look to have a better plan for the next year your financial assessment should provide the same outcomes.
 
What are the most important steps to take after this review?
Start building plans to resolve any of the outlined issues and this generally needs to start with an honest review of your expenses because if you are having any of the problems we have mentioned, it usually means that you are spending more than you should be based on your income. One great step is divide your expenses into discretionary spending such as streaming services and entertainment and non-discretionary which are expenses such as food. Lower spending in the discretionary category by simply cutting back and then look for ways to lower non-discretionary spending by refinancing or consolidating loans, being more energy efficient and getting quotes from competitors for services like insurance. Use all of this new found income to address the most important issues such as paying off debt and increasing savings. Just like pruning and care in the Fall is important for landscaping success next year, pruning expenses and building savings are key for financial success in the new year. Waiting only make success next year more difficult.

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