The end of the year is a time for caroling, gifts and celebration with the family, but it can also be a great time to get your financial affairs in order. There are three essential things that you can do to your finances at the end of the year to ensure that your next fiscal year will be better.
- Talk to your boss
If you are employed, you might be going through a year-end performance review. This can be stressful and cause a lot of anxiety, but the main thing here is to focus on clear and concise information. During the review, or perhaps at the beginning of the New Year, it’s important to understand what went right in the previous year, what could go better, and what the expectations there are for the future.
Questions regarding the metrics used to measure success, expected target revenues, new product initiatives, and any new clients can help you have a better understanding of the best path going forward. They can also help you ensure your department’s and company’s overall success. With a well calibrated scope for the next year, you will be able to be very effective at your job, which may lead to raises and even promotions.
- Set new financial rules
The New Year is also a time when many people set grand goals for themselves. Some resolve to lose weight, others want to quit smoking, and others choose to pick up a new hobby. However, many overlook that the New Year offers a chance to rethink their financial rules. For example, people who are fairly new to their profession, might benefit from the 50/30/20 rule, which states that you should dedicate 50 percent of your salary to personal needs, no more than 30 percent to entertainment, and at least 20 percent to your savings.
For some though, that might be too drastic of a change to make all of a sudden. Even if you choose to invest as much as 1 to 3 percent of your salary, you are on your way to financial security in the future. However, even small goals made on New Year’s Eve can be forgotten in the frantic activity of the day to day life that follows. This is why it’s important to take the plan a step further, and automate your finances. It can be something as simple as having a sum of money automatically drawn from your paycheck account into your 401(k) plan. If you can afford it, and you haven’t already, it might be a good idea to make a deposit right away, before the end of the year in order to defer taxes on that income.
- Open a merchant account
Finally, if you are a business owner, a wise financial decision would be to open a merchant account and start accepting credit cards. This can greatly increase your customer base and subsequently improve your bottom line. With your business running smoothly and generating more money, you should be able to afford to invest more, pay yourself more, and generally have a more relaxed outlook on your financial situation.
For more information on how to best manage your finances at the end of the year or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com.