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Planning for the New Year

October 10, 2014

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I know it's only October, but the new year will be here soon. Here are just a couple things you should do to prepare for the new year just around the cornerI know it’s only October, but the new year will be here before we know it. After all, look at how this year has been flying by! With that said, here are just a couple of things you should do to prepare your finances for the rest of this year and for the new year just around the corner.

Plan Ahead for the Holidays

Between now and the new year there will be lots of situations that arise where you will be tempted to over-spend, ignore your budget, or where you’ll want to say “the hell with budgeting, I’m buying the flat screen”, or is that just me (on Black Friday)? 🙂

Halloween, Thanksgiving, Black Friday, Christmas, and New Years are all pretty spendy holidays. Now is the time to get your budget in order and make sure you’ve planned ahead with some cushion to cover additional expenses that will come up this time of year. It’s better to budget for them now and have extra money leftover than to give in to the thinking that you will just avoid all these “extras” and end up blowing your budget big-time with holiday expenses. Gift giving, extra holiday food for gatherings, and maybe even a new holiday party outfit are all things to consider budgeting for in the next couple months. Are they all necessary things? No, but like I said it’s better to budget for them and not spend anything than not budget and spend a lot. Set aside some time to review your holiday plans, make gift giving lists, and meal plans for the upcoming holidays. Don’t forget charitable giving in your holiday budget. (I’ll be talking more about this soon!)

Review Your Progress and Set New Goals

Part of preparing for the new year is reviewing the progress you’ve made toward your goals – financial and otherwise – throughout this year. Measuring your progress in 2014 will help you set realistic goals right off the bat for 2015. For me, 2014 was the first year I set any real financial goals, like how much debt I wanted to pay off and how much money I wanted to have in savings, and I just made a blind shot in the dark. Now that I’ve been through almost a whole year and I’ve been tracking my progress, I now know how to set more realistic goals starting off in 2015. This should help me as I (hopefully) won’t have to adjust them (at least not as much) throughout the year.

Part of planning and setting goals for the new year is estimating how much your salary will be after any year-end raises or 401K contribution changes. Personally, I’m anticipating a small raise and I’m hoping to increase my 401K contributions by 1%/pay period. I never want to count my chickens before they’ve hatched, but I do want to be prepared for how I’m going to use any income increase I may receive, so I’ve created a projected budget using my anticipated new take home salary for the new year. Of course, I will make changes to my projected budget as the new year gets closer and I find out a definite number for my new take home pay.

In addition to having a plan for any raise I may get, I also have a plan in place for how I’m going to use my year-end bonus (which is actually paid out Feb 1st). I try to realistically predict how much this lump-sum payment will be, but I am careful not to spend it before I even have it in hand.

What else do you do to help plan for the new year?

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Kayla

Kayla is a mid-20s single girl living in the Midwest, USA. She is focused on paying off her consumer and student loans, while simplifying her life and closet. You can join her on her journey at ShoeaholicNoMore or follow her on Twitter.

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19 responses to “Planning for the New Year

  1. I think it is smart to plan for the new year now. But, I’m a severe over-planner 🙂

    Our company just announced changes to the pension and 401k programs so I really need to decide what I’m going to do come Jan 1st!

  2. I buy all my gifts the first 2 weeks of November. It’s a strict policy, everything else that’s last minute or just “pops up” comes from my at-home emergency stash of gifts – candles, gift cards, etc. Just takes the gift buying stress off to just buy once and then be done!

    1. I usually try to buy all year round so I can take advantage of sales and deals throughout the year. I am usually done by mid-November at the latest.

  3. Great plans, Kayla. And I do think it’s very good to strategically plan what you want to do with your raise. Like you said, it’s too early to lock in those changes, but knowing how you want use your raise and bonus before you receive makes it much easier to follow through. Lots of people just spend them on whatever, rather than what matters most. 🙂 Have a great weekend!

    1. Thanks Shannon! I used to be one of that just splurged any “extra” away, but now I’ve learned better.

  4. I have to admit, I groaned a little when I read, “Plan Ahead for the Holidays”. But you’re absolutely right. It’s a great idea to set up holiday budgets/plans now, before the stores start playing carols and tempting us with pretty lights. (My BJ’s had Christmas trees and other stuff up in September – not cool.)

    Like you, I started down this personal finance journey in 2014. I’m excited to embark upon 2015, knowing a lot more about what I need to do, than I did at the start of this year.

    1. I think a lot of us that just started in 2014 are looking forward to 2015 as a chance to set better goals and be more realistic about our personal progresses. 🙂

  5. I’m all for planning ahead, but autumn has only just begun, it’s still warm enough to swim in the ocean here and I don’t want to think about winter just yet. 2015 can wait a while.

    1. I’m a bit jealous, it was down to 33F here overnight. I’m not ready for winter either, but I know my finances will be better off if I plan ahead for the holidays and the new year.

  6. We like to plan early for the new year too, although we haven’t done anything yet. This year has been full of unexpected expenses, so we’re just working on frugaling it like a champ for the next three months. Then we’ll work on solidifying the 2015 goals. 🙂

    1. Sounds like a good plan to me Laurie. I’m hoping to set more realistic goals off the bat for 2015 now that I know more of what to expect for my finances and debt payoff rate.

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