The New Year is a golden opportunity to get everything in order for the months ahead. As Scott Crockett, Everest Business Funding CEO, explains, the start of the new year is the perfect time to get your financial house in order.
By taking a few housekeeping steps at the beginning of the year, you'll be putting yourself in a great position to reap big dividends all year. If you want to capitalize on this, you'll need to start early.
Below are some of those smart financial housekeeping moves for the New Year.
Take a Look at Your Taxes
At the start of the year, you'll get together all your tax documents to file your annual taxes with the IRS. This is a great time for you to take a look at your financial picture for last year and do a mini-projection for the year ahead.
Each individual's tax situation is unique, so there is no one "right" way to go about it. However, if you have an idea about where you might stand early in the year, you can make adjustments that could improve your situation.
No matter your income situation, you can look at ways to reduce your tax liability in the year ahead. Are you having enough taxes taken out of your paycheck? Are you taking full advantage of tax-advantaged retirement accounts such as IRAs and 401(k)s?
The beginning of the year is a great time to focus on next year's taxes while there's plenty of time to make changes.
Review Your Budget
The New Year is the best time to review your monthly budget. You can look back at the previous 12 months and ensure that you've included all new income and expenses as separate line items.
Doing so will help you identify any areas of concern for the year ahead, including potential threats to your financial health. This will also help you plan for new expenses in the year ahead.
Reviewing your budget at the beginning of the New Year can help you plan for both the expected and the unexpected without significantly compromising your financial health.
Build an Emergency Fund
Building an emergency fund is a great way to give yourself a financial cushion. This serves as a "rainy day" fund in case unexpected expenses arise or you experience a disruption in your income. It could help you pay your bills if you get laid off or pay for emergency repairs to your home.
Scott Crockett says that most financial experts suggest having three to six months' worth of your living expenses socked away in a separate emergency fund, just in case.
If you don't already have one of these funds, the New Year is a great time to start one. And if you already started an emergency fund, see if there are ways that you can add to it in a more aggressive way starting in the New Year.
About Scott Crockett
Scott Crockett is the founder and CEO of Everest Business Funding. He is a seasoned professional with 20 years of experience in the finance industry. Mr. Crockett's track record includes raising more than $250 million in capital and creating thousands of jobs. Scott has founded, built, and managed several finance companies in the consumer and commercial finance sectors.