7 Ways to Prepare your Finances for the New Year

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With Christmas nearly here and the New Year just around the corner, many of us will turn our attention to 2020.  Like me, you’ll probably set yourself a money goal for next year.  It could be to save more, spend less or make more in the year ahead.


Whatever your goal, it is worth taking the time to prepare your finances for the New Year.  And there are some great ways to do this.


Set A Goal

You may already have one, or you might have a vague idea.  Now is the time to fine-tune it and plan how you are going to achieve it.


“Save more money” is a terrible goal.  It’s not SMART!  You need to set yourself a challenge that is more clearly defined.  You might say “save at least £20 every month for the next year.”  Then you’ll be able to see if you have achieved it.


Review The Last Year

If you are still searching for your money goal next year, then looking back might give you some clues.


Dig out the old budgets or flick back on the expense tracker and look for any bad habits that you might want to change.


Perhaps you realise that your spending on takeaways has been creeping up and you want to put an end to that.

Or maybe your income has been slowly increasing and it is time to up your game and aim for the big numbers.


Sort Your Budget

Whatever tool you have been using to do your budget it is time to check that it is still the best tool for you.


Look over the categories, is there anything that needs adding?  Anything you no longer need?  Is there something else that would give you a clearer overview of your money?

Now is the time to make those changes and ensure that you have a useful budget tool for the year ahead.


Review Your Bank Accounts

A bit like your budget, it is good to check whether your bank accounts are doing the best job they can.  If not, you have lots of choices to change them.


Switching bank accounts could provide you with access to new tools to better manage your money.  On top of that, you may be able to earn some extra cash too.


When looking at your savings, think about interest rates.  Do you need to change to new accounts to get better rates?  Could you lock-in any of your savings for the next year to access better rates?


Look At Your ISA Allowances

The tax year ends on the 5th April, so take a look now at your ISA allowances to see if you can maximise this.


You get a limit on how much you can pay into an ISA each year and these are tax-free, so it is worth using them.


Plan For The Year Ahead

Think about what is coming up next year.  Are there any big birthdays?  Or maybe there is a kitchen appliance that is on its way out?


If you make a plan for covering these expenses now, then you’ll be better prepared when they do happen.  Even if that old washing machine doesn’t breakdown this year, you’ll have the money ready for when it does.


It is worth thinking about any one-off sums of money you may have coming your way too.  This may be a bonus from work or a tax refund.  Planning for random income means that you are less likely to blow it and more likely to use it sensibly.


Get Your Tax Return Done

Your self-assessment must be done by 31st January.  If you earnt more than £1,000 in the tax year 2018-19 then you’ll need to get it sent off and paid before that date.


It is not half as scary as you think it is going to be, and not doing it is going to be worse.  Get it done now and you can head into next year ready to do it all again.


What do you want to achieve in 2020?

Share your money goals in the comments below.  Then let us work together to make them happen.

Disclaimer:  Remember the information you read here does not represent advice.  Any ideas or suggestions are just that and may not work for you.  Read the full disclaimer here.

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4 thoughts on “7 Ways to Prepare your Finances for the New Year”

  1. Adventure Aficionado

    I really think sorting out your budget is a huge one, since most times, when we find a tool and use it for a while, we never go back to re-evaluate its effectiveness. And making sure we have all the necessary items in our budget, including things like saving for an emergency fund, are also ones we need to think about!

  2. Great post. So often people focus on their bucket list and personal habits but neglect to do any kind of financial planning.

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