January Financial Checklist

As we wind down the year (and the decade), I’ve been reflecting on the past 10 years and how much has happened.

I’m not the same person I was in 2009, that’s fer sure.  Some things that were once so important are no longer a priority.  And other things have moved up and get more of my attention.

Does anyone else feel like they’re still figuring this life thing out??

I’ve accepted the idea that none of us have all the answers, some just look like they do.

We’re all in this together (despite what millennials may think) so it’s important we reach out and help our fellow sojourner when we can.  Everybody needs a friendly, helping hand, no matter how together they seem.

My heart is in encouraging late savers to not give up on their dream retirement.  My hope is that the articles I share on this blog will help you feel more confident about your future, and give you inspiration to achieve your financial goals.

That’s why I post a financial checklist every month.  Each list is meant to help you be more intentional with your finances and get you a little closer to financial freedom.

If you’ve struggled with making your future a priority, I encourage you to make some goals for 2020 and start dreaming about what’s possible.

Because you don’t want to look back 10 years from now and only wish you had.

Here are 5 things you can do in January to help you get off to a good start.


1.  Create A 2020 Budget

If you do not yet have a household budget, now is the time to start.

There are many varieties of budgets you could use.  Which one you choose is not important.

What does matter is having a system that tracks your money.

A budget will help you see where the leaks are, so you can take steps to cut those costs and have more money to put toward savings or debt.

If you’re living paycheck to paycheck or you struggle with living below your means, a budget can help you break that cycle.

And if you’ve already created your 2020 financial goals, a budget will be like the guard rails on the path to reach them.  It gives you the boundaries you need to stay on track and focused.

I use the zero-sum method, and also budget using our previous month’s income.  Both have helped us get better at managing our money.

Related Post:  15 Financial Goals to Start With

Everyone’s situation is unique, so don’t pay too much attention to how others budget.  Find a method that makes it easy for you to track your spending, and then align your budget with your goals.  You may need to try a few different options before you find the system that works for you.

And also, keep in mind that nobody is perfect at budgeting, especially if you’re new to it.  Give yourself time and grace to find your rhythm.


2.  Create or Update Your Will

Ringing in the new year generally instills a sense of hope and inspiration and anticipation for what’s to come.

Most people don’t make a plan for their death, anyway.

Instead, we make plans to achieve something uncertain, possibly sometime in the distant future, not truly knowing if it will ever happen, but putting all our efforts in the hope that it will.

Unlike death.  Which, is 100% certain, but we hope won’t happen, so we ignore planning for it.

My friend, if you don’t yet have a will, it’s time to face reality.  Either you’ll leave this earth letting a stranger determine what will happen to the people you love and the things you care about, or you can lovingly write your wishes down ahead of time so there are no surprises.

Which one sounds better to you?

And don’t let the cost keep you from getting it done.  Sites like Nolo, LegalZoom, and Rocket Lawyer make it economical for the do-it-yourselfer.

Commit to creating a will, so you can continue to take care of your family even after you’re gone.  It’s one of the most loving things you can do for them.


3.  Start Automating

Once you have your goals clear and a budget written down, do yourself a *huge* favor and start automating financial transactions.

Doing this will remove emotion and willpower from the habit – two things working against you when you see a little extra cash in your account.

First, set up an automatic monthly payment for every recurring bill you have.  The best way to do this is through your bank’s bill pay website tool.

For variable expenses (like utilities), see if you can set up an average monthly payment plan.  I do this for our natural gas bill, so our payment is the same every month.

Related Post:  May Financial Checklist

Automating your bills will reduce the risk of missed payments and late fees.  It will also take one more financial decision off your plate, so you can focus on other things.

Second, set up an automatic payment for any charitable giving.

Maybe you tithe to your church or give to a non-profit that you support.  Don’t let unplanned expenses eat up those funds throughout the month, and ultimately rob you of something you value.  Automate your giving so that money is contributed at the beginning of your budget cycle.

Third, set up a direct deposit for your savings.  You can either have a percentage of your paycheck put directly into a retirement fund like a 401k or IRA, or you can split the direct deposit between a checking and savings account.

The point is to put a certain amount in a savings vehicle before you even see it.  This way, you make your future the priority.

Automating your finances will ensure your bills are paid on time, you stay committed to your value of giving, and you pay yourself first.


4.  Review Your Retirement Accounts

The great thing about automating your retirement savings (as mentioned in #3 above), is that you don’t have to put any mental or emotional investment into it.

The money is taken out before it gets to your hands, so it’s as if it was never there to begin with.  You basically “forget” that you made that money and you learn to live off the remainder.

But when it comes to managing those funds, it’s risky to take a “set-it-and-forget-it” approach.

At least once a year, review your retirement accounts to see if you should make any necessary adjustments:

  • increase your contributions, if you can, to get as close to the maximum allowed
  • take advantage of catch-up contributions once you’re over 50
  • rebalance your plan investments to modify the level of risk and align them with your goals
  • consider if you need to convert a traditional IRA to a Roth IRA
  • make sure fees are within the acceptable range

You don’t need to spend a lot of time tinkering with your retirement accounts (in fact, it’s best that you don’t).  But an annual review will help keep your investment decisions in line with your retirement goals.


5.  Do A Financial Inventory

As you begin this new decade with vision, optimism, and enthusiasm, it’s a smart move to take account of where you’re at right now.

Related Post:  October Financial Checklist: 5 Steps To Smart Money Management

When it comes to your finances, an annual self-check will give you a snapshot of your current financial health.  This is extremely important, because making even small course corrections can make a big difference in the long run.

A financial inventory could include:

  • reviewing and updating your current assets and their values, such as your savings accounts, real estate properties, vehicles, and valuable belongings like jewelry and antiques
  • the current balances on all of your debts, including your mortgage, student loans, credit cards and medical bills
  • your latest credit report and score
  • a list of all your financial accounts including account numbers and login information
  • copies of all insurance policies (auto, homeowner’s, health, life, etc.)
  • copies of all estate plan documents, such as your will, living trust, durable power of attorneys, etc.
  • current tax documents, records and receipts

This is a lot of information, and it will take you some time to go through it all.

One way to keep it all organized is by creating a financial binder.  This can be as simple as a 3-ring notebook with dividers and labeled tabs.

In addition to the financial records above, you may want to add other important pieces, such as:

  • annual social security reports
  • titles and deeds
  • automobile information such as license numbers and VINs
  • list of user names and passwords
  • contact list for your doctor, lawyer, insurance agent, banks, tax person, accountant, etc.

Having all of this sensitive information in one place can be very risky.  You should always keep any physical copies locked up in a safe, or a digital version password-protected.


Plan Your List

You could have the most inspiring or ambitious goals, but they’ll only amount to a nice list unless you take action.

So get out that pretty new planner you just bought or that calendar your kids got you for Christmas, and plan your list.

Create intentional blocks of time when you can be purposefully focused on taking care of your financial health.  Much like your physical health, this will increase your chances of remaining independent in your older years.

Don’t let another month – or *heck*, another year – go by without getting closer to your big vision of retirement.

The time to start is now.  Happy New Year!

Leave a Reply

Your email address will not be published. Required fields are marked *

4 × one =

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Amazon Associates Disclosure

FinanceOverFifty.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.