It’s almost 2019. Are you happy with your financial situation? There are steps you can take to address any financial challenges you’re facing and help improve your financial situation in the coming year. The Massachusetts Society of CPAs recommends starting by asking yourself these questions:
Is My Budgeting on Target?
Tracking your monthly income and expenses is one of the most important things you can do to maintain control of your finances and successfully plan for the future. Seeing how much money comes in and how much goes out each month can help you identify opportunities to save additional funds or spot overspending and identify ways to address it. Creating a budget, updating it at least weekly, and sticking to it are some of the most important things you can do for your finances in 2019.
Am I Reducing My Debt?
Aim first to whittle down the balances on high-interest loans, including credit card debt. Two steps can help you succeed: 1 - Resolve to pay more than the minimum balances, which will help you pay off the debt sooner and can significantly reduce the amount of interest you pay over time. 2 - Use your budget to find ways to cut spending, which will make it easier to increase your monthly credit card payments.
The AICPA’s 360 Degrees of Financial Literacy website has calculators to help understand how to most efficiently pay down your credit card debt.
Am I Saving Enough?
Did you reach—or make progress toward—your important savings goals in 2018? Retirement savings should be on everyone’s list. Make it easier by having retirement contributions deducted from your paycheck automatically and deposited into a retirement account. Having an emergency fund, with six months of salary that you can count on in an emergency, such as loss of a job or a health emergency, should also be on your list.
How has My Tax Situation Changed?
Many important new tax law changes became effective in 2018. How will the new tax rates affect your wallet? Will other changes, such as limits on deductions for state and local income, sales, and property taxes, make an impact? If you’re in the process of getting a divorce, are you aware of the new rules on alimony deductions? If you’re a business owner, what will new tax regulations mean for your business? Now is a good time to connect with your CPA to take stock of what the recent tax changes will mean for you and to plan for the future.
Where Do I Want to Be a Year from Now?
Flashing forward to December 2019 can help you better identify your near-term and long-term objectives. Would you like to have paid off all or most of your debt? Gotten a little closer to goals such as funding a college education for your kids or a secure retirement for you and your spouse? Or would you like to have a little more money in the bank than you do now so you can take that dream vacation? Looking ahead and thinking about where you want to see yourself in the future is an important part of defining your best next financial steps.
Turn to Your CPA
No matter what financial questions you’re grappling with, your local CPA can help. Locate them using the MSCPA’s helpful Find-a-CPA tool available at mscpaonline.org/find.
And get ready to have a great new year!