2015 is about to set off. As the New Year, 2016 is waiting to be given way; it’s time for us to give a final look at our finances for this year. Don’t consider this a walk down the memory lane because it’s not for your leisurely pursuits. It’s for you to review your finances and do better next year.
Quarterly tax clearance
Do you pay taxes on a quarterly basis? If so, then have you already cleared the final payment? If not, then clear it today. Two other considerations are estimating this year’s income including salary and bonuses, and guessing the earning for the next year.
Also, decide the tax payment mode for 2016. Will you opt for monthly payment next year or continue to pay quarterly? Decide based on your personal finances. If your earning comes from a stable source, then monthly payment won’t be a problem. Otherwise, stick to the quarterly payment model.
The year-end is the time to go for vacations. I suppose you’ve enjoyed your tour already. How much had you pay for it? Whichever amount you have paid, have it coincided with what you’ve anticipated earlier? If there’s a disparity between what you’ve estimated, and what you’ve paid, then it could be because of not making a vacation budget earlier.
The benefit of making a vacation budget is you can stop the flow of out-of-pocket expenses. Making a vacation budget is not that difficult, what’s difficult is sticking to it. No impulse shopping, no eating out and no movie viewing in the theatres for few weeks. Difficult, but to stick to your gun, there’s no other alternative.
If you haven’t gotten to prepare a vacation budget this year, be ready for the next year.
Some people are all into gift exchange. You are not one of them, and stay a bit aloof. Very well, but what if a friend of yours or a close relative visits your house with a gift? You couldn’t back off then. You’d have to gift something to that person, for the sake of modesty.
It’s wise to be prepared for scenarios like this. Anticipate (Don’t make wild guesses, though) which of your friends can give you gifts. If it’s a guy, have a budget ready so you could buy some adventurous gifts exclusively for men, at a moment’s notice. If it’s a girl instead, shop around for hair ties, lip gloss, fancy apparels. Don’t buy, just get an idea of how much the gift pack might cost.
One more thing, it’s really fun to pack someone else’s wish list. If you haven’t enjoyed this in 2015, make sure you do that in 2016.
Cash flow prevention
The goal of making a budget is to be able to identify the areas, responsible for the leak of money. Rhetoric aside, areas that account for most of the spending. I’ve written extensively all through this year to make people aware of the benefit of budgeting.
If I’ve failed to reach you, then it was my fault. Anyways, enough of modesty. What you need to know is you have to stop cash flowing out in 2016. Identify the culprit, responsible for it. Check the cash flow statements of 2015, they’ll give you an idea. The grocery spending may have been way out of its limit. Or it may have been the restaurant bills, which resulted in loads of cash flowing out.
Once you identify the key areas responsible for cash flow, stop spending money on those areas. Start doing this from the very first month of 2016, I am sure you’ll see a reduction of cash flow by June.
I know it’s easier said than done. But if you want your finances to be stable, and want to spend a whole year as carefree as a bird, you have to stop borrowing money, which includes offering hard cash to a retailer instead of sliding your credit card in the terminal slot, having an emergency fund ready to tackle sudden unexpected expenses.
Resisting yourself is also necessary if you don’t want to tip over into the spiral of debt. Banks offer mouth-watering schemes, which most customers couldn’t resist. Say no to such offers. Don’t spend extravagantly, and you never need payday loans from suspicious lending agencies.
The country’s cumulative loan stands at $21 trillion. Take an oath that you won’t take any loan in the upcoming year.
Walk the talk
We make resolutions every year, most of which we fail to keep. Promise yourself 2016 will be an exception, and keep all the resolutions to better manage your personal finances in 2016.
What do you think of the tips shared here for 2016? Do you want to add anything? Let us know in the comment section.
Tina Roth is a passionate personal finance blogger and loves to write about better money management and personal finance. In addition to being the owner at the Finance Blog, you can find her works on many other finance blogs.