The end of the year is a busy time for any middle class family. There’s preparing for the holidays, protecting your children against seasonal stress, and preparing for the financial challenges and opportunities of the new year. But getting everything in order financially can feel like just another stress – especially if you’re not sure where to start.
A simple checklist can help. After all, you use lists to manage everything else in your home, from grocery shopping to chores to getting everyone to their activities on time. Why not use one to get your financial affairs in order as you head into the new year?
To learn which items deserve a spot on a year-end money checklist, GOBankingRates turned to Connor Bauserman, financial planner at Preferred Financial Group.
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While the bulk of the holiday spending is already behind most families, the end of the year is still a good time to assess the damage — and prevent it from happening again next year.
Bauserman said one of the most common mistakes he sees is overspending during the holidays without a clear plan.
“If you don’t go into Christmas with a budget, things can get out of hand quickly,” he said.
He said holiday promotions — from Black Friday and Cyber Monday to weekly seasonal deals — can create pressure to spend more than planned, especially when the purchase is justified as “too good to pass up.”
Now is the time to review your December spending, pay off any balances where possible and create a simple savings plan for next year’s holidays. Bauserman recommends setting aside a small amount each month.
The average family spends about $1,600 during the holidays, and when that expense hits all at once, it often ends up on a credit card or comes right out of savings. Bauserman said spreading that cost by saving about $134 a month can make the season much less financially stressful.
One of the easiest end-of-year improvements families can make is automating their finances where possible, especially with savings and investing.
“This ensures that you are prioritizing savings over spending,” Bauserman said. “It also allows families to save for things like holidays throughout the year, which helps regardless of income.”
With automatic transfers in place — whether to a high-yield savings account, brokerage account or retirement plan — your financial goals are being worked on in the background, even when you’re not actively thinking about them.