Didn’t 2014 just start? At least that’s the way it feels to me. Well, regardless of how things seem, the reality is the year is just about over. But that doesn’t mean you can’t make a big impact on your financial future before the big ball drops in Times Square.
You can still achieve some very important financial goals before Dec. 31.
1. Make a Plan to Get Out of Debt
You may not be able to get out of debt between now and the end of the holiday season but you can set yourself up now so you’ll be debt-free very soon. Of course the first step is to watch your spending over the holidays. Don’t overdo it. That only makes it harder to solve your debt situation.
Next, create a system to eliminate debt by first consolidating and refinancing to the lowest possible interest rate. Once you do that, put all the muscle (and money) you can towards paying off the highest cost debt you have and make the minimum payments towards other credit card balances. As you pay off your most expensive debt continue to keep your debt payments as high as possible towards the next highest-cost debt. Repeat this process until you are debt-free. Believe me it won’t take that long. But you won’t ever be done if you don’t start. Why not begin the process of lowering your cost of credit card debt today? (You can use this free calculator to see how long it will take to pay off your credit card debt. You can also check your credit scores for free to see how your debt is affecting your credit standing.)
2. Track Your Spending
Even if you aren’t in debt, it’s important to know what you spend on average each month. Once you know where the money is going, you can decide if you are spending it as wisely as possible or if you need to make some changes.
Many people think they know how much they spend on average but most of us underestimate our monthly nut by 20-30%. You can use a program, a spreadsheet or simply look at your bank statements and track your total withdrawals for the month. It doesn’t matter how you do it. But if you aren’t tracking your spending, I recommend you start doing so now.
What’s great about starting to track spending before the new year is that you get used to your system and if you use a program or spreadsheet, it will also simplify your tax reporting for next year. This is especially helpful if you do your own taxes.
3. Review Your Estate Plan
Things usually slow down at work during the holidays. That gives you time to get to important items you may have been putting off. Estate planning is one of those items that people often procrastinate on.
I’m not asking you to get your will or trust done by Dec. 31 (although you could). But at the very least do two things:
- Educate yourself about the difference between wills and trusts.
- Find a good estate planning attorney or legal service and start the process.
My parents completely ignored this topic. When they both died young and unexpectedly, it made it monumentally more painful, difficult and scary for my siblings and I. Don’t take chances. You can and should start taking care of your estate planning now.
4. Review Your Life Insurance
As long as we’re talking about estate planning, we might as well dust off your old life insurance policies and give them the old once over. Some people have outdated and overly expensive life insurance they no longer need. Others walk around woefully under-insured, exposing their loved ones to great risk that is completely avoidable.
Pull out your old policies today. Do you still need those policies? If not, cancel them. If you do need insurance, start comparison shopping to make sure you have the right coverage at the right price.
5. Start Investing
If you’ve been on the fence about investing it’s time to stop thinking and start doing. If you don’t know how to get started, there are plenty of great resources on the Web. You need to understand the basis, of course, but you don’t need a Ph.D. in economics before you leave the starting gate. Once you read up on the basics of investing, be prepared to start slow and learn as you go. You will be fine.
And remember: You don’t need a pile of dough in order to start investing. If you are a DIY investor, there are plenty of good online brokers who will open an account for as little as $500. Can you think of a good reason to wait until next year to start investing? I can’t either. Let’s go.
6. Maximize Your Retirement Contributions
Before year-end, make sure you have maximized allowable contributions to your retirement plan at work. Unless you are in debt, you want to take advantage of employer matching if at all possible. Even if there is no matching program at work, try to maximize your plan contributions. This will give you the benefit of tax deferral and a forced savings plan.
Call your HR department today to find out if you can bump up your retirement plan contributions for the year.
7. Get in Front of Your Finances
You have an amazing opportunity right now. Make sure you are on top of your financial game now, next year and beyond. Take out a calendar right now and schedule when you are going to begin and follow through on the items on this list.
Look at your calendar for the next seven days. When are you going to:
- Inquire about refinancing your debt?
- Set up your spending tracking system?
- Start asking for estate planner referrals?
- Review your life insurance?
- Set up your investment account?
- Call HR and make sure to bump up your retirement contributions to max out for the year?
Taken all together, the list above might seem overwhelming. But if you do one task each day, you can really change your financial life this week. Each task above will take you between 15 minutes to three hours to complete. Are you going to do one item each day this week? How will you feel once you’ve begun? Or are you going to wait until “after the holidays”?
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This article originally appeared on Credit.com.