I get a kick out of the different lesser known “holidays” that occur throughout the year. Did you know International Talk Like a Pirate Day falls on September 19? My favorite is National Ice Cream Day which is celebrated on the third Sunday in July. Certain causes even get a full month of recognition, such as Breast Cancer Awareness Month (October) and Black History Month (February).
Don't worry, January isn't left out of the fun. The first month of the New Year is not just for recovering from the overindulgence of the holiday season or for struggling to stay committed to our resolutions. January is also National Financial Wellness Month, a great time to assess your financial situation, reflect on the progress you made towards your financial goals during the last year, and set new goals and intentions for the new year.
Here are a few things you can do to start the year off on great financial footing:
Update Your Net Worth Statement
Your net worth is equal to your assets minus your liabilities. A positive net worth indicates you are on the path to building wealth. A negative net worth indicates you might need to focus more on saving and paying off debt.
Tracking your net worth over time can help you see the progress you are making towards your financial goals. It’s also a good way to make sure you know what all of your resources and debts are so nothing slips through the cracks!
Review Your Spending Plan
I get it – no one likes the word “budget,” so let’s talk about your “spending plan” instead.
Having a good understanding of your cash flow is one of the most important considerations when working towards financial independence. Pull out the spending plan you created at the start of last year. Now look at your credit card and bank account statements from last year to see how your actual spending compared to the amount you planned on spending. Is there a difference? If you spent more last year than you thought you did, try to determine the cause of the difference so you can adjust your spending plan for the current year.
And if you have never created a spending plan… well, there’s no better time to start than right now!
Consider Upcoming Changes
Think about what the upcoming year might bring for you and your family. Is there anything on the horizon that might need some extra financial planning and attention? Are you, your kids or your grandkids planning to change jobs, move or get married? Is anyone starting college or thinking about launching their own business? If you think your household income or expenses might change in any significant way this year, it would be a good idea to revisit your financial plan to see if it needs to be updated.
Resolutions abound in January as we seek to improve our overall health and well-being in the New Year. We strive to eat healthier, exercise consistently, drink less, sleep more, and better manage our stress. After all, stress can lead to anxiety, depression, and physical health problems as well as an increase in the use of alcohol, cigarettes, and drugs – the opposite of what our new healthy selves are trying to achieve!
Year after year, the American Psychological Association’s 2023 Stress in America™ survey reports that finances and money are the most significant source of stress for adult respondents. So, if getting healthy is a priority for you this year, don’t forget to give some time and attention to your financial wellness as well.