Photographed by Arthur Elgort, Vogue, 1994
Everyone has their end-of-year rituals. Some people kick off a diet
and join a gym. Others pledge to spend more quality time
with friends and family.
For me, December is the time I take major stock of my financial house. My husband and I sit down and look through our statements and bills. What changed in our lives in the last year? (For us, 2018 brought a new baby boy, Cashel). What are our upcoming goals? And if they’re the same as last year’s, how much progress did we make towards them?
Then, we make whatever adjustments we need to. While most people wait until tax time to confront their finances, I’m a big believer that the new year is the best time to take a deep dive into your wallet and start fresh with a new attitude towards your money. Why? For starters, end-of-year can be a quiet time at the office for many. Who needs added stress at tax time, which is already a frenzy? Plus, we have a natural tendency to reflect and look ahead as the calendar year winds down.
Take advantage of that collective thoughtful mood and write down your goals. Where do you want to be in the next three years? Maybe you want to grow your family, or become a homeowner
. Then, figure out what you need to accomplish in the next 365 days to move closer to those goals.
Finally, set a recurring date in your calendar for this year-end money review, to be sure you do it again in December 2019. Here are a few resolutions to get you started:
1. Resolve to rip off the BandAid and confront how you feel about money head-on.
Does talking about your bank balance give you a sense of shame? Overcome those emotions and remember that money is an essential part of your life, just as much as your health is. Talking about money should be as easy, and planned, as a visit to the doctor.
2. Find an advisor.
Enlist someone who’s an expert
and can hold you accountable to your goals. That should mean hiring a financial planner; someone who will support you with good advice. Whatever investment you have to make to enroll a partner-in-money is worth the peace of mind you’ll feel knowing you’re on track.
3. Have a true money sit-down.
This is the check-in I have with my husband at regular intervals, and always at the end of the year. Whether it’s with your partner, your kids if they’re old enough, your parents, or your roommates, schedule a money summit. Ideally, you’ll do this on a Saturday—with no alcohol involved. Openly and frankly discuss all of your issues, and make a plan right then and there to resolve them. Bring paperwork, and get ready to have some uncomfortable conversations. Most importantly here, set a follow-up meeting. Depending on how urgently you need resolution, choose another day three or six months later to check your progress.
4. Clean out your wallet.
I mean this literally—as in, toss old receipts and nail salon punch-cards you’ve collected in there over the course of the year—and figuratively, too. Create a digital place to store all your statements. It could be in your email inbox, or a new email altogether where you can route all your bills and bank statements. Run through your subscriptions and shut everything off that you aren’t using, review your bills for errors and extra charges, and figure out what you can cut from your budget. (And here’s a fun activity for a snowy Sunday: Find $5,000 in your closet. With all the user-friendly sites out there, you can resell
almost anything: old bags, shoes, clothes, tech that you don’t use, furniture, books and knick-knacks collecting dust in your basement. Round it up and put it on the market.)
5. Check your lines of credit.
Check your credit score for free on creditkarma.com. Look for active, open credit accounts. Don’t go on a closing spree—closing too many cards, especially your oldest ones, can actually hurt your credit—but be aware of them, and resolve each year to close any lines of credit that you are not using. Random active lines of credit are dangerous live wires. They could be hacked, and if you’re not monitoring them, you’d never know. Now is the perfect time to make sure you’re entering a new year with your financial identity intact.