The year is quickly coming to a close, and with just a few weeks left, many of us are feeling the rush to tie up loose ends. November is here, and before you know it, you’ll be deep in December festivities, attending parties, enjoying time with family, or even indulging in a little Detty December fun. But amidst the celebrations, there’s one crucial area that deserves your attention—your finances.
As the year winds down, this is the perfect time to reflect on your financial progress and set yourself up for success in the coming year. Whether you’re aiming to boost your savings, reduce debt, or plan for a major financial goal in 2024, the steps you take now can make a world of difference. Remember, financial health isn’t just about how much you earn—it’s about how you manage what you have.
Here’s a comprehensive guide on 12 smart money moves to make before December 31st to end the year on a strong financial note.
1. Review Your Annual Budget and Set Next Year’s Goals
Take a deep dive into your finances for the past year. Start by reviewing your budget:
- Did you stick to it? If you consistently overspent in certain areas, try to identify the reasons. Was it due to poor planning, unexpected expenses, or impulse buying?
- Were your savings goals met? If you aimed to save a certain percentage of your income, check how close you came.
Use these insights to prepare your budget for next year. Adjust categories that didn’t work and allocate more to savings or investments if you have room.
Pro Tip: Set SMART (Specific, Measurable, Achievable, Relevant, Time-bound) financial goals for next year. For instance, rather than saying, “I want to save more,” try, “I will save ₦100,000 every month to build an emergency fund by mid-2024.”
2. Clear High-Interest Debts
Debt, especially those with high-interest rates like credit cards, payday loans, or certain types of personal loans, can cripple your financial health. Make it a priority to clear or significantly reduce these before the year ends.
Why it matters: The longer you carry high-interest debt, the more money you lose in interest payments—money that could otherwise be used for investments or savings.
Action Plan:
- Allocate any year-end bonus or extra income toward paying down these debts.
- Consider consolidating your debt or transferring balances to a lower-interest product.
- If you can’t clear everything, prioritize the highest interest rates (the avalanche method) debts.
Read: How to Prioritize Needs Over Wants As December Approaches
3. Maximize Your Savings and Investments
Are you taking full advantage of your savings and investment opportunities? Now’s the time to boost your contributions. If you haven’t been consistent, the year-end could be the perfect chance to catch up.
For Nigerian Investors: Platforms like Treasury Bills, Mutual Funds, or Government Bonds are excellent low-risk options. If you’re more risk-tolerant, consider investing in the Nigerian stock market or dollar-based investments to hedge against inflation.
Tip: Increase your contributions with any extra income (e.g., December bonuses). The earlier you invest, the more you benefit from compounding.
4. Take Advantage of Year-End Sales for Essentials
While Black Friday and December sales can tempt you to overspend, they also present an opportunity to purchase essential items at discounted prices. If you plan ahead, you can save significantly on everything from electronics to household goods.
How to do it right:
- Create a list of essentials you need to purchase (not want).
- Set a budget for each item and stick to it.
- Compare prices from multiple retailers to ensure you’re getting the best deal.
5. Conduct a Subscription Audit
It’s easy to lose track of how many subscriptions you’re paying for, especially with the convenience of auto-renewal. These small charges add up from streaming platforms like Netflix, Spotify, and Showmax to unused gym memberships or mobile apps.
Action Steps:
- Review your bank statements for recurring payments.
- Cancel subscriptions you don’t use or can live without.
- Consider downgrading to cheaper plans for services you use sparingly.
6. Track Down Unclaimed Refunds or Rebates
You may have forgotten about money owed to you in the form of refunds, rebates, or cashback rewards. It could be from returned products, overpaid bills, or loyalty programs.
Steps to reclaim your cash:
- Check with utility providers, banks, and retailers for unclaimed refunds.
- Look at your loyalty programs for unused rewards points that you can redeem.
- Every little bit adds up and can help ease financial pressure during the festive season.
7. Review Your Insurance Policies
Life changes over the course of the year—maybe you got married, had a child, or purchased new assets. These events may necessitate changes to your insurance policies.
What to review:
- Life Insurance: Is your coverage sufficient? Do you need to adjust your beneficiaries?
- Health Insurance: Are there more comprehensive plans available within your budget?
- Car and Home Insurance: Ensure you’re adequately covered without paying for unnecessary extras.
8. Set New Financial Goals
Your financial goals should evolve as your life circumstances change. Use this time to assess your long-term objectives and set new targets.
Examples:
- Saving for a down payment on a home.
- Start a retirement fund or increase contributions.
- Building a college fund for your children.
Tip: Write these goals down and review them periodically throughout the year to stay on track.
9. Rebalance Your Investment Portfolio
Markets are dynamic, and your portfolio’s initial allocation may have shifted over the year. Rebalancing ensures your investments align with your risk tolerance and financial goals.
Review your portfolio mix (stocks, bonds, real estate, etc.). If any asset class is overrepresented, sell a portion and reinvest in underrepresented areas.
Read: Start Planning Your Detty December Now!
10. Create or Boost Your Emergency Fund
An emergency fund is your financial safety net for unexpected expenses, such as medical emergencies or car repairs. Ideally, this fund should cover 3-6 months of living expenses. If you haven’t started one or your current fund is lacking, it is time to prioritize it. Start small if necessary, but stay consistent.
11. Plan for Charitable Giving
The end of the year is a time to give back. Whether you donate to a charity, support a community initiative, or help someone in need, your contribution can make a big difference. Bonus: Depending on the organization’s nature, charitable donations can offer tax benefits.
12. Explore Tax-Saving Opportunities
In Nigeria, certain investments come with tax benefits. These include government bonds and specific mutual funds. If you run a business, look for deductible expenses that can reduce your taxable income.
Pro Tip: Consult with a financial advisor or tax expert to identify other tax-saving strategies relevant to your income and investment structure.
The end of the year is more than just a time for celebrations—it’s a golden opportunity to take control of your finances and lay the groundwork for a successful new year. By making these 12 smart money moves, you’ll finish 2023 on a strong note and set yourself up for financial growth in 2024. Take control of your finances today! Visit RefinedNG for more tips and expert advice.