How to Prepare Now for a New Financial Year

For me, Christmas and new beginnings go together. Everything just feels different during the Christmas season. Maybe it’s the twinkling lights, the energy from activity and excitement all around, or the extra kindness between strangers. It’s just the right transition into a fresh new year.

When preparing for a new financial year, I generally have a series of steps I take (not necessarily all at once, but definitely before the year ends) to ensure I’m all set up and ready to go by the time January 1st comes around.

Set Your Intentions for the New Year

I always encourage keeping goals in mind first and foremost anytime you’re thinking about money. It’s easy to get caught up in the details of earning, spending, and saving and forget about your overall “why.”

Before you jump into these tasks, take a minute to consider why money is important to you and how it can best impact your life over the next year. Consider how money will help you live your values more fully over the next year. I’ve found it helpful to have a “word of the year” to help me remember what is most important to me (more on my new 2024 word soon!).

Prior Year Review

Some years are more joyful to look back on than others, but I review a few key things at the end of each year. My focus is on celebrating the past year and figuring out any changes I need to make for the upcoming year. These include the following tasks:

Annual spending & saving review

We’ve all been surprised when we look at our actual spending and see how much we’re spending on certain things (this year, it’s groceries amiright?!). This is especially true when looking at things on an annual basis rather than just a monthly snapshot.

Here are a few questions to ask yourself when reviewing your cash flow at the end of the year:

  • Am I surprised by the totals of any of my spending or saving categories?
  • Which categories am I spending more in than I should (based on the things I value most)?
  • Which categories should I spend more on next year?
  • What was my saving rate over the past year?
  • Is the amount I’m saving sufficient for me to reach my financial goals?


Net worth tracking

While net worth isn’t the absolute most important financial metric, it’s definitely one that you should be tracking on at least an annual basis.

You don’t have much control over the stock market, the value of your home, or a number of other things, but you do have control over how much you save. The key is to be empowered by the growth in net worth so that you are encouraged to save for the future and achieve your financial goals. Compound interest is, as they say, the eighth wonder of the world.

Wins & Learning Experiences

Ever since I was introduced to the idea of annually reviewing both wins and losses (ahem, learning experiences), I’ve been obsessed with the idea. I practice this with my money routines and all of my life goals. In the past, I solely focused on everything I needed to improve, but considering how much progress I’ve made already helps me gain perspective and confidence.

When you’re reviewing your financial year, you’ll want to write down some of your wins, for example:

  • Tracked expenses consistently and regularly checked the monthly budget
  • Paid off credit cards and didn’t incur any more credit card debt
  • Increased savings rate by 2%
  • Filed taxes on time
  • Increase credit score by 50 points

With regard to learning experiences, this could be something like:

  • Incurring debt
  • Forgetting to pay bills on time
  • Not having sufficient money in your emergency fund
  • Investing in something risky that didn’t work out


The focus is on writing down your struggles so that you can see how far you’ve come during next year’s review (or many years from now!). It will also help you to set specific goals for the following year.

Tax Planning Deadlines

We can’t forget to consider taxes, of course (while all of you out there rarely think of taxes, you’ve got me to remind you often about them, ha!).

There are some key things that need to be done by the end of the year:

  • Add additional withholdings if necessary (note: yes, you can make tax estimated payments or an extension payment, but withholdings are treated as if paid throughout the year, so it helps you avoid any unnecessary penalties or interest from the IRS)
  • Use up your FSA funds
  • Contribute to college accounts for dependents to obtain state tax credits (if offered in your state)
  • Consider bunching certain itemized deductions (such as charitable contributions) to certain years
  • For business owners, consider whether to push expenses into the current year or delay some until the next year depending on estimated business income


Fortunately, contributions to IRA and HSA accounts can be made until the tax deadline (generally April 15th), so there is some time to complete those and minimize your tax bill. But keep those in mind now so you can make sure to fund them in the new year.

New Year Strategy

It’s essential that you have a clear view of your actual spending and savings for the current year before you start creating a budget for the next year. Everyone tends to underestimate their spending, and an annual view can frequently clarify more realistic expectations when there are significant variations in spending (especially with the holidays!).

Here are a few things to consider:

  1. Create a budget for the new year (I suggest trying YNAB or Tiller!)
  2. Adjust budget categories to reflect new priorities (or simplify them)
  3. Estimate taxes to make sure withholding is on track (especially if you’ve adjusted it mid-year!)
  4. Review detailed financial goals and revise them as needed

Final Thoughts

When you’re wrapping up the year and setting new year’s resolutions, don’t forget to take a step back and take a look at the big picture. Money has a direct impact on so many other aspects of life. Just like any other area of your life, going into the financial new year with set intentions and goals can help to create an amazing life that aligns with your values.


2 Responses

  1. This was exactly what I needed, as I get ready to do the annual update to the workbook and prepare for 2024. Keeping the Why in mind. I always need this reminder. =)

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I’m Kathryn Hanna-wife, mother of 3 and a Certified Public Accountant. I love to budget (really, I do!) , build spreadsheets and spend money on travel, sewing supplies and good chocolate.


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