Personal Financial Planning Checklist for the New Year

financial planning checklist

It’s that time of year again when we look back at the things we’ve done in the past year and, at the same time, make plans for the current year. What we’ve learned and what we want to accomplish financially this year.

Let’s face it. The future is unpredictable, and we really do not know what will happen. However, when we have a solid financial plan that takes care of any eventualities, then we are most likely to have some peace of mind.

This is something that everyone knows, especially if you have a family. You must think of your kid’s college education, your mortgage, emergencies, etc. Where do we tend to end up?

The answer to this question is debt. Debt keeps us from fulfilling our financial goals. Debt cripples our growth and maturity and gives us that unnerving feeling that we are unable to fulfill our most dire needs.

According to statistics, Americans are drowning in debt. Before the 2008 recession, people were merely treading on water near debt. When it actually hit…well it was a big one. People with the most debt sunk and were forced into insolvency and foreclosures.

It was such a terrible time.

When talking about planning our finances, we must understand where the problem started and how we can help each other.

The US economy is believed to be in recovery but unfortunately, a lot of Americans are still struggling to get out of debt and quite a number of them do not have savings or investments for the future.

Currently, consumer debt is fast approaching its highest number of almost $14 trillion.

According to CNBC, the average American household has a debt of about $38,000, including but not limited to auto loans, mortgages, and student loans.

It is hard not to think about debt as anything but entirely negative. But let’s pause for a second. It’s all about perspective. Some people wind up with some form of debt – whether that be paying for school, buying a home, or investing money in starting their own business. It can happen to anyone. When we start living beyond our means and acquire debt that is not necessary, then we DENY OURSELVES A FUTURE.

How can you help yourself?

You probably know of one or two people who are drowning in debt because of their spending habits. Financial stress is causing more and more people into anxieties and depression as they do not know how they can get themselves out of a financial mess.

You need to start looking at where things have gone wrong and try to correct the problem.

It is the process of re-evaluating yourself and asking whether that expense was necessary, or whether that new investment was needed. Looking at your finances closely will most likely free up some money for the future. Your money mindset will also play a big role in helping you reach your financial goals for 2020. Let’s get started!

Your 2020 Financial Planning Checklist Should Include the Following:

Your debt management program

It is extremely important that your debt is number one in your financial planning checklist. Debt that is out of control will only make your life hard in the long-run. When you accumulate too much debt, it means that you will spend most of your time trying to get out of it, because whether you like it or not, debts must be repaid.

Good budgeting skills can help you to ensure that you are not caught up with an overwhelming amount of debt. You need to ensure that your bills are paid and on time.

If you have a loan, keep a reminder of the repayment date each month, or ensure that you have given instructions to the bank that when your paycheck comes in, they should repay your loans immediately to ensure that you do not lag behind.

If you are already in debt, take your time and analyze all of them in detail, starting from the one with the highest interest rate, down to the cheapest one. Then, look at your finances and allocate a specific amount that should go into repaying these debts one at a time.

Engage your creditors on how you can repay them, and ensure that you stick to the plan they give you.

Never spend your money before you have it.
-Thomas Jefferson

The problem with debt is that you will end up in a situation where you cannot take out any more credit because creditors will not trust you with their money. Your credit score will also suffer, and if this happens, you will only be eligible to very high-interest rates in the future.

Here are some of the most popular ways to eliminate your debts:

  • The snowball method – you pay your debt with the smallest balance first.
  • The avalanche method – you start paying your debt with the highest interest first.
  • The snowflaking method – this is where you apply any extra money that you make to pay your debt immediately.

Repaying your debts and managing the already existing debt is the first step towards future-proofing your finances. No one will give you money in the future, regardless of the type of idea you have, if you have a bad track record.

Should you seek help from financial experts?

Yes, there are people who are trained to help you plan for your future, invest your savings, and come up with a plan to get you out of debt.

People who are deep in debt should consider talking to a debt counselor, who will advise you on what’s best for you to get out of debt, and offer you tips and ideas on how to manage your finances. While these professionals may cost money, it is money wisely spent. Enrolling in a debt management class can also go a long way in helping you with your debts.

You will find many of these financial experts online, but make sure that you do your homework before you hire one. Ask a trusted friend or a family member for their references and narrow down your choices to the one you feel can help you with your personal financial situation. Some of these experts only deal with high-net-worth clients while others offer their expertise to just about everybody.

There are many types of financial experts out there; your job is to find the right one for your current financial situation.

Your savings plan

This is one of the most important points in this whole article, and if there’s one thing you are going to take from this article, this is it.

Your savings shall guide your future. If you are interested in becoming financially secure, then a savings plan is a must. You must plan now, so that you and your children can have an easy time when they go to college, or if you want to buy a bigger house, or a bigger car, etc.

Experts advise that it is wise to have the equivalence of at least three months’ worth of bills saved up in the form of savings. What this means is that in case you lose your job, you should at least manage to survive for the next three months without a paycheck, and this should be enough time to secure a new job.

Here are some saving tips;

Record all of your expenses

Have an idea of how much you spend each month and how much you need. Keep track of all your expenses, including your daily Starbucks run, the food you eat, every utility bill you have to pay, and all of the extra things you probably spend your money on.

Once you have this information, categorize it, such as necessary expenses, utilities, extra but fun things such as dining out every night, buying a new pair of shoes every two months, etc.

Get rid of everything that is not a priority, because this is money you shall free up for savings.

Budgeting for your savings

See how your budget includes rent, utilities, and food, including savings in your budget too. Once you realize that you have been spending your money on unnecessary and unwanted stuff, keep this money aside as part of your savings.

Include this in your monthly plan and stick to it. Savings are just as important as paying rent.

Set savings goals

Set some concrete goals for yourself. Having goals will motivate you to save up money. Ask yourself what you are saving for. You could be saving for your wedding, a down payment on a new house, for vacation, or even retirement. These goals are important because they give you an idea of how much to save.

You can classify them into two main groups – long-term and short-term saving goals.

Short term goals

These goals should include plans that you intend to accomplish in the next 1-3 years such as;

  • Having an emergency fund to cover up to 3-6 months of expenses
  • A vacation you wish to take in the coming year
  • A down payment for a car
  • New furniture
  • Home repairs and improvements

Long-term goals

These are goals you wish to accomplish in the next 4+ years, and they include;

  • Down payment for a new home
  • An education fund for your kid
  • Retirement depending on your age
  • Vacation home

Saving for retirement

This is definitely a long term goal. Retirement may seem far away when you are young, but it is best to start putting money aside for it at a young age. The sooner you start planning for it, the better.

If you are employed, your employer will automatically enroll you for the workplace pension plan. If your company offers a 401k plan, make sure that you enroll. Ask your HR manager for an Employee Benefits Booklet and see all the company benefits afforded to you then look at your budget closely to determine how much you can afford to contribute to your 401k plan.

In general, you should try to have a specific percentage of your paycheck going towards this.

Your investment options

When it comes to investing your money, try your very best to pick the right investment vehicle based on your personal situation. There are plenty of options available to you.

Consider the following tips when choosing your investments:

  • Your needs and your investment goals.
  • Your age and how long you will invest.
  • Your health.
  • Your retirement plans.

You can choose from the following or invest in all of them:

  • A high-yield saving account – these are bank accounts that offer higher interest rates compared to the regular savings account. A good example here is the high yield American Express Savings account.
  • A certificate of deposit (CD) – CD’s locks your money for a specified period of time within which you get to earn a specific interest. Interests usually are based on the amount of money deposited and the length of time your money is invested.
  • Money market account – this is similar to saving accounts but with some checking account features. Most money market accounts are FDIC insured with the exception of the so-called High-risk money market fund, which in reality is an investment. Check with an investment banker if you’re considering this type of investment.
  • Stocks and mutual funds – these are long-term investments that have the potential for high returns if you are patient enough to wait. You must do your due diligence if you want to invest your money in the stock market.
  • Real Estate – nowadays, investing in Real Estate comes in different ways. Some will buy a home for their family and watch the property appreciate over the long term. Others buy rental properties and/or flip homes for a profit. Another way is to invest in REITs or Real Estate Investment Trust, which is simply buying shares of a company that operates real estate income-producing assets. There are also Crowdfunding platforms that offer individuals the opportunity to invest in Real Estate crowdfunding.


There are many financial resources available online for all of us, but we do not make use of these resources or at least give it a try. Most of the time, the problem lies in the way we think. We want to get things done, and we want better finances, but we’re not disciplined enough to make that change happen. The financial planning checklist I mentioned above is a great list to get you started with your finances in a positive way.

Why not make this year different this time. Let’s be more organized with our finances. Let’s be more focused on what we want to accomplish financially. Start and stick to your budget, get started with a savings plan, and pay more attention to how you spend your money to reduce debts and accomplish your financial goals. It’s now or never!

Founder, writer, thinker and digital marketing addict. He is passionate about self-development, personal finance, and the stock market. He believes that financial knowledge combined with self-discipline is the key to achieving financial freedom. An avid golfer and a 15 handicapper.

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