It’s been a wild year. December 2020 is about to start and soon after that, a new year. What a blessing, what a gift! It is a great time to do a summary of what happened during the last months. Here are my recommendations on how to look back on 2020 to start a great plan for 2021!
Evaluate your income
Evaluate your annual income in net and gross terms. Your gross income is important to be able to calculate a monthly average of gross and net income. The annual figure will give you some perspective on how big or small the monthly amount is. Then when you calculate the gross/net portions and evaluate the percentage of taxes or expenses; you’ll realize how big or small that piece of the pie is. This is a huge motivator for me when I realize that I pay around 25% of my income to the government in the form of taxes. 25%! Yes, that is a full quarter! Some people pay more, others less. If you think about it, the government makes sure you pay them first through paycheck deductions because they want to make sure they get paid and you don’t run out of money next year. In a setup like this, we get used to living with our net figures and our life goes on. This same concept could be applied to your savings. If you deduct another 20-30% of your gross income and transfer that automatically every month to your savings and investment accounts, your net worth and financial health will thank you in the future. Save or invest more if you can.
Evaluate your expenses
Evaluate an average of monthly expenses and the percentage of your net and gross income compared to the total. Are you spending a considerable percentage of your net income on trivial things? Can you change that? Check out my post: Exposed! Monthly Spend.
Evaluate your achievements
Evaluate your goals from the beginning of the year until now. You still have a few days remaining in the year. Is there something you could still do? This is a huge win and a nice way to finish the year with another checkmark right next to your goals.
Check out my post: Goals: A Quick Guide.
Plan next year
Buy a very nice 2021 planner. If you prefer a digital version or your smartphone, that works as well. I like the feeling of putting ink on a piece of paper. Use it. Start with January. If you forget about it for 2 months, then just pick it back up and do a summary of what you accomplished during the missing months. Start over, you still have a few months ahead.
I love this Weekly and Monthly Planner. This is an affiliate link, which means if you make a purchase through this link, I may receive a small commission at no extra cost to you.
January is ok to start your planning, but you should plan now and start “doing” in January. Plan what? Your life! Plan what you want to do, to be, what you want to enjoy, what you hate and don’t want to do anymore. If you don’t plan, then you’ll end up doing things for other people’s plans. Take ownership of the present and think of important stuff that you always wanted to do but never were able to do. They don’t need to be big things, for example:
- January: Create a monthly budget
- February: Plan my own business
- March: Travel to X place
- April: Open a retirement savings account
- May: Evaluate monthly budget and rearrange expenses
- June: Plan summer project
- July: Do summer project
- …
Gratitude
Write down 10 things that happened during 2020 that you are grateful for.
Evaluate your health
Are you on a good track? What changes do you need to do? Why? When? How?
Evaluate your happiness
It is true that we can’t always be happy. I hope to be happy most of the time. How did you feel during 2020? Think and write down all the happy memories you have had in your life and describe the environmental, social and physical conditions of those good times. What is missing? Is there something you can replace? What can you add that you haven’t had since then?
After you review 2020 and plan for 2021, keep in mind that not everything means spending your hard-earned money. The majority of the accomplishments coming from goals require a very big amount of hard work versus money spent. Can you borrow or rent instead? Can you save instead of putting yourself into debt? You can do it, I know you can!
