4. Refresh your budget
Since you’ve already downloaded your bank statements, why not tally up your spending over the last year while you’re at it? Coming up with a budget is easy, but where many people fail is in tracking their spending.
For myself, at least, I often underestimate how much I spend every month. This is especially true when I factor in bigger purchases – like anniversary dinners or birthday presents – because I tell myself they are a “one-off” when they’re actually not.
With actual numbers rather than guesstimates, you’ll be able to better gauge whether you need to adjust your spending this year.
5. Take inventory of your assets
You don’t have to be rich to lose track of your wealth. It’s actually fairly common when you own investment products on different platforms or spread your cash across multiple savings accounts or digital banks to maximise interest on your savings.
Take stock, perhaps on a spreadsheet, of where all your money is. Find out how much savings you have accumulated (this will be helpful in the next step).
Review your investments. Do you need to rebalance your portfolio because you made crazy gains on one stock? Does your thesis for your stock picks still hold, or have there been new developments in those companies? If you’re holding bags, is it time to cut your losses and deploy that money elsewhere?
6. Revisit your financial goals
Lastly, now that you have a clearer picture of your financials, check in on your money goals. Are your income and savings on track to get you where you need to be? Maybe you estimated that you would earn more money than you did by now, or you didn’t factor in that inflation would add so much to your costs.
Revisiting your financial goals regularly allows you to assess them more objectively, away from the emotions of the time you set them. It’s a good habit to have, so you’ll always have time to make adjustments if you’re falling behind on your goal.
And if you find out you’re on track, it’s encouraging to see how far you’ve come or maybe help you feel less guilty about treating yourself once in a while!
