Are you ready for a new year? Well, you’re not alone! 2020 has proven to be a challenging year for many of us. For better or worse, many people have felt an impact in their financial lives this year. 

So now is the time to review everything and get a game plan in place before the new year starts. Here are the 7 areas that you may want to take a closer look at before the ball drops on December 31st.


1. Your annual budget

Have there been major changes in your income? Whether you lost a job or accepted a new role, got married or divorced, or moved to a new home or changed your lease — this is the perfect time for everyone to review their expenses. Review all the changes that have happened this year and get a new budget in place for the year ahead.  

It’s a good idea to note what went well and what didn’t in 2020 with your finances and shift your spending and savings as you plan your 2021 budget.


2. Changes in debt

To put it simply, review your debt. You might have had to incur debt to get through months of not having enough income, or buying a new home, or simply some support with bills. If you’re ready to start paying off this debt, review a debt payment plan, and start planning on how to pay this off in 2021.


3. Financial goals

What are the financial goals that you focused on this year? Did you make progress on them or did you fall off the wagon with everything else you were juggling this year? What financial goals do you want to focus on in 2021?

While it’s normal to have many financial goals that you want to achieve in this lifetime, try to focus on ones that you can make the most impact on this year. Start with your top three financial goals and prioritize making strides towards them. For example, maybe 2020 was a financially tough year and your goals for next year are rebuilding your cash cushion that you depleted, paying off debt, and saving towards retirement.

4. Insurance coverage

It’s always a good idea to review all your coverage on an annual basis. From life insurance, health insurance, home insurance, and more — there are so many insurances we all need. Take a moment to review what coverage you have in place and if it is the best coverage to have in place, given everything happening in your life right now. You might find it’s time to find new coverage to better protect you, your loved ones, and your assets.


5. Savings accounts

Maybe 2020 depleted your cash cushion, so now is the time to review and plan for how to rebuild your savings account for any expenses or opportunities that may arise in the future. Your cash cushion should always be a priority so you don’t have to turn to borrowing money.

Review how much of your savings your spent this year and how much you need to save — or add — to your account for the upcoming year.


6. Investment accounts

Whether you won big in the stock market or your portfolio took a hit this year, take a moment to review your investment accounts. From your 401(k) or IRA to your brokerage accounts, are you allocated properly? Ask yourself these few questions to get a better idea of where you stand: 

Do you have the right portfolio based on your risk tolerance and timeframe of your goals?

What fees are you paying on your accounts? 

Does it make sense to make some changes to reduce fees and invest those savings?

It’s a good idea to review your investment accounts every six months to a year in order to feel confident with your investments and not make emotional choices if the market becomes volatile in the next year.


7. Estate planning

Year end is a good time to review your estate planning documents and make sure everything is clearly defined (in writing). Work with your attorney to ensure that everything you want in this stage of life is properly documented.

Financial planning isn’t meant to be a set-it-and-forget-it task. Take the appropriate time to review and understand your financial decisions from 2020 so you can plan for the year ahead. Whether that’s saving more, paying off more, or simply staying on your current path — make sure you feel ready to tackle 2021.


About Learn

Financial advice for real people, by real people. You shouldn't need a degree to understand your money. Join Head of Education, Brittney Castro and Altruist mentors as they break down financial tips and strategies in a real way to help you finally understand how to achieve your financial goals faster.