Q: Dear Ruchi, I can’t believe the year is over already! I want to do a final sweep of this year’s finances to make sure I am in check for 2025 and I’m not sure where to start. What are some tips for our end-of-year finances?
A: I’ve got you! As the year draws to a close, it’s the perfect time to pause, reflect, and plan ahead. A little end-of-year financial check-in can set you up for a year of prosperity and peace of mind. Here’s a simple, three-step approach that I love to help you get ready for the year ahead: Look Back, Look In, Look Out.
Look Back: Review Your Numbers
Start by reviewing your financials to get a clear picture of where you stand. Your Profit and Loss (P&L) report is a good place to start, though it’s always important to dig deeper. Ask yourself: Did I have a profitable year, but still feel cash-strapped? This might indicate a cash flow issue rather than a lack of revenue. Look at your income and expenses, and identify any patterns. Where did the money come from, and where did it go? Which offers and customers were most profitable? This reflection will help you spot areas for improvement and give you a clearer picture of your financial habits. Simple!
Look In: Reflect on Your Money Habits
Next, take a moment to reflect on your relationship with money this year. How did you handle it? Did you make investments that paid off, or did you find yourself trying to make money the solution without much strategy? Did you spend intentionally, or were there times you overspent without thinking? (It happens!) This isn’t about being hard on yourself—it’s about learning what worked and didn’t. Understanding your behaviors around money will help you make better decisions next year and put you in a stronger financial position.
Look Out: Plan for Greater Prosperity
Finally, look ahead to the new year. It’s not just about what you earn; it’s about what you keep. Use your current financial situation as a baseline to set realistic goals. In addition to ensuring you are budgeting to pay yourself, plan for taxes, savings, and debt repayment. Set aside funds for tax season so you’re not scrambling later. Consider building or reinforcing your emergency fund to give you peace of mind. If you have debt, prioritize paying it down so you can save on interest and move towards being high-interest debt free. With clear planning, you’ll ensure that your money works for you and sets the foundation for greater financial freedom.
Overall, remember, small steps can lead to big wins. It’s about taking small, intentional steps to set yourself up for success. By Looking Back at your numbers, Looking In at your habits, and Looking Out to plan for the future, you’re taking control of your financial journey. Allow these reflections to guide you to creating action steps for the new year ahead so you’ll feel more empowered and ready for whatever comes your way.
Here’s to your prosperity!
Ruchi
