On this episode of How To Money, Matt and Joel talk about how to conduct an end-of-year review of our finances. Much like the two-faced Roman god Janus, who looks both backward into the past and forward into the future, we need to take stock of how 2020 went financially and how we’d like 2021 to be. It’s pretty unlikely that any of us escaped from the pandemic’s effects completely unscathed, so we probably all have to adjust our financial goals and expectations, but with a clear eye on our past spending as well as our ideal future, we can make better money moves and enjoy greater financial independence. If you have a spouse or significant other, it’s best to do this exercise together so you can get on the same page about your goals and habits. Here are five questions to guide your thinking.
Start on a high note, the guys say: Pinpoint the financial goals you were able to accomplish this year. Even if they seem small, it’s important to celebrate your triumphs. Then get real: Look at your spending for the year. Where did your money go? It can be easy to fall into patterns that slowly siphon our money away from more important goals, like overusing services like Grubhub or paying for a streaming service we barely use. Are there places you can do better in 2021? Conversely, look at what you spent money on this year that brought you the most joy. Having money is nice, but the goal is to spend it on the things that can have the greatest impact on our happiness.
Once we’ve looked back on our spending, we need to look to the future. This is where we think about how we’re spending our time as well as our money. What do you want your ideal day to look and feel like? What needs to change in order to get you closer to that ideal day? Sometimes even small schedule tweaks can make a huge difference, but if we never take the time to articulate what we want, we’ll never make the changes we need to get closer to our ideal. Maybe you want to live in a different city, get into sustainable farming, buy an RV, or start a business. Whatever it is, your financial goals should reflect that ideal life. What are the biggest levers you can pull to make a positive impact on your finances in 2021? With these questions to help guide you, you can set yourself up for a great year. Get started with this episode of How To Money.
If you want to be sure you're listening to the podcasts everyone else is checking out, iHeartRadio has you covered. Every Monday, iHeartRadio releases a chart showing the most popular podcasts of the week. Stay up to date on what's trending by checking out the chart here. There's even a chart just for radio podcasts here, featuring all your favorite iHeartRadio personalities like Bobby Bones, Elvis Duran, Steve Harvey and dozens of others.
Photo: Getty Images