How to Prepare for 2013 or Any Year!

by Krantcents · 41 comments

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Looking for new ideas, I came across hundreds of articles explaining how to prepare for 2013.  There are a lot of things to do, but why limit it to 2013?  You should prepare for every New Year by doing a few things.  If you did not start a couple weeks ago, it is not too late, but no more procrastinating!  Here are my five (5) things I do every year and you should too.

Tax Preparation

Every year I clean out my files!  I take my current year files and put them in a storage box and start new files for the New Year.  Transferring the files takes about ten (10) minutes, but I use the opportunity to start my tax spreadsheet.  My spreadsheet represents a summary and checklist of everything I normally receive in January.  I use it as an organized method to get all my tax information together.  It is really good to do this in the prior year so you can do something about your taxes.  In case you missed it, I wrote about year-end tax planning tips in early December.

Taking action to avoid higher taxes is prudent.  A little planning can save you a bundle!  Of course, it depends what your tax bracket is, but you should think about how you can lower your tax bill all year, don’t wait until December to make decisions.  There are investments that can be more tax efficient, tax deferred or tax free.  If you are not thinking about this, you should discuss it with your CPA or tax attorney and do some tax planning together.  An hour’s worth of planning can save you much more than the fee.  He or she can discuss your choices and you determine which ones you should make.

Strategic Planning

Strategic planning is a plan of an organization’s direction, aligns its resources with goals and execution of objectives to achieve their mission or vision.  It sounds a lot like goals that everyone should set for themselves, but longer term.  If you do not have goals and an action plan you probably are not serious about achieving your goals.  How often do you set goals for long term such as retirement, children’s education or your career?  If you don’t, how do you expect to achieve these goals.  I am not talking about New Year’s Resolutions here, but long term goals that are years away from now.

I remember doing something like this when I was thirty-one (31) years old.  I don’t remember exactly what month I sat down and started planning, but roughly seven (7) years later I achieved financial freedom.  If that is not enough to motivate you, you don’t really want to achieve it anyway!  If this sounds like too much planning, think again!  SMART goals generated by a strategic plan are unstoppable.  It is never too late to start planning.  There is a reason, successful companies take a lot of time to do a five (5) year plan.  You may want to develop a long range plan and include shorter plans as part of it.  You can revise your plans periodically, but it gives you the structure to help you achieve your goals.

Reflection/Action Plan

Reflecting on your accomplishments is fun!  Reflecting on your misses or mistakes requires an action plan.  Analyzing your results means looking into the reasons for failure.  It is not enough to just identify your mistakes, but you must execute an action plan to achieve your goals.  Successful people do this all the time and turn failure into success.  You learn from your successes and failures!  What changes do you make to succeed?  If the new efforts fail, you make more changes.  Professional athletes change their training when they are not achieving the desired results.   Then they practice until they get the desired results and keep practicing after they achieve the results.  We should all approach our goals like pro athletes!  You need to monitor your progress and adjust your efforts  in order to succeed.  Remember quitters never win!

Personal Development

The process of improving oneself through activities such as enhancing employment skills,  awareness and identity, develop talents and potential, build human capital , enhance quality of life and contribute to the realization of dreams and aspirations.  This may require additional education or training.  It is what you need individually to get to the next step.  It may be a promotion, a different career, a personal finance class, weight loss, yoga, learning a sport or recreation.  It is what you want to work on to help you be better or more successful at work, with family or personal life.  It can range from joining Toastmasters to learning to play golf.  You can start with the skills you have and add the skills you need to make you better.  Why wait, just do it!

Year-end things that can be done anytime

Too often, people put things off to a certain date such as starting a diet on a Monday as if there is something magical about Monday.

  • Review investments  – I usually re-balance my portfolio in December.   You can evaluate your asset allocation at any point during the year.  It is best, if you do it at the same time each year though.
  • Organization – Process of organizing something.  Whether you arrange your desk, closet, cabinets, home or work.  This is a continuous process.  I routinely organize my desk every week or two.  You can organize files, computer files and use organizational tools to make yourself more effective.
  • Budgeting – Usually this should be done along with your annual planning process.  You can start r revise your budgeting throughout the year.  If things change, you may have to revise your budget multiple times a year.  I usually revise when income changes or expenses change dramatically.
  • Career planning – Many people feel this only occurs when you start your career.  You should take an active role in your promotions or the direction of your career.  This includes changing employers or starting a business.  Are you learning the skills necessary for that next promotion or job?
  • Capital spending – It would be terrific if you could schedule your capital spending!  In the business world, capital spending is estimated and part of a five (5) year plan.  You know that your appliances, cars, furnace, water heater, A/C, roof do not last forever.  You can estimate and set up savings for these replacements.
  • Estate planning/insurance/savings – If you do not address these issues, someone will!  Having a will/trust, health-care proxy (medical power of attorney), insurance needs and retirement/savings .  There are no magic dates to address these issues.  It is easy to procrastinate, but you shouldn’t.  There is always someone who will live with your mistakes and it will be your spouse and children.  Review your estate documents annually!

Final thoughts

I tried to give you some of the things I do or check every year.  Some of which I do during the fourth quarter such a tax planning.  Others such as strategic planning, reflection on your goals, developing an action plan, personal development etc can be done annually on any date.  When I started one of my first strategic plans, I just created it!  It was for roughly eight and a half (8 1/2) years.  Just because traditional plans are for five (5) or ten (10) years does not mean you have to adhere to it.  The longer the period, the less likely it will be accurate.  Remember, you still need to derive your annual goals from this longer plan as well as an annual budget.  You either prepare for 2013 or plan to fail!

Photo by: grongar

Carnivals:

Finance Carn. for Young Adults at One Cent at a Time
Carnival of Retirement at Simple Budget Blog
Yakezie Carnival at Narrow Bridge Finance
Carnival of MoneyPros at Master the Art of Saving

You either prepare for 2013 or plan to fail!

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{ 40 comments }

Holly@ClubThrifty January 17, 2013 at 4:38 am

The new year is a great time to reevaluate everything. I still need to clean out my files though. There are so many things that I definitely do not need anymore.

Krantcents January 17, 2013 at 6:59 am

I usually start in December and finish in January. It is mostly etting ready for the new year and getting my tax stuff together for the year that just finished.

Kathleen, Frugal Portland January 17, 2013 at 8:32 am

GREAT list.

Krantcents January 17, 2013 at 1:25 pm

Thanks! I am just trying to share what I do every year.

Fred January 17, 2013 at 8:45 am

Planning your tax in advance is essential. When I started up my own business alongside my day job I was naive in not recording expenses and incomes thoroughly enough and when it came to filling in tax returns it was unbelievably stressful!

Krantcents January 17, 2013 at 12:51 pm

I think everyone makes those kinds of mistakes, but you have to learn from it.

Sicorra@TacklingOurDebt January 17, 2013 at 10:12 am

I am in the middle of putting together our corporate taxes and finding a new accountant. Fortunately, from my understanding, we do not need to keep as many different receipts and claim as many things as they do in the US. But accountants for corporations are so expensive up here, that I just hate doing it.

Krantcents January 17, 2013 at 12:54 pm

I found my CPA years ago when I had businesses. You should try to get a referral from one of your advisers (banker or Lawyer)or friend. I found mine through my lawyer.

The Happy Homeowner January 17, 2013 at 10:18 am

Haha….I agree about the diet on Monday bit–so funny! And I also agree that some things such as budgeting and organizing are year-long endeavors.

Krantcents January 17, 2013 at 12:55 pm

I agree! I analyze my expenses monthly and compare it to my budget. Not that different from when I was in business.

John S @ Frugal Rules January 17, 2013 at 10:21 am

Great post! I love your sentiment, because if you do not plan, then you really do plan to fail. We do a very similar thing for our taxes as well. It saves us a of time in the long run and really does not take much time when you make the changeover.

Krantcents January 17, 2013 at 12:59 pm

It is an old saying, but very true! Although I do not really enjoy preparing taxes, I try to stay organized so it less stressful.

Marie at FamilyMoneyValues January 17, 2013 at 10:44 am

I always have a lot to do at year end….just as you seem to.

Krantcents January 17, 2013 at 1:00 pm

Since I am a teacher, I am always on vacation at year-end, but it is a great time to get things ready for the new year. It also makes it a lot easier and less stressful.

John@MoneyPrinciple January 17, 2013 at 2:41 pm

Over here our tax year runs from 6th April to 5th April (don’t ask!) but some folk have to fill in a tax return by the end of January. Good reminder for us!

Krantcents January 17, 2013 at 4:05 pm

These are the series of things I go through every year to get things ready for the new year. Glad it works in the UK too!

Fig (Figuring Money Out) January 17, 2013 at 5:08 pm

Great post! The new year is the perfect time to do these things. I’m in the midst of several myself!

Krantcents January 17, 2013 at 5:29 pm

Thanks, putting together your taxes is never fun, but necessary just the same. I am making a few changes to my 5 year strategic plan.

Kim@Eyesonthedollar January 17, 2013 at 5:30 pm

I am going to use some of my time this year for organizing better than I do now. I have files, but they aren’t as neat and easy to find as they should be. With working part time, I hope to get better at doing all my accounting that I do at home as I go rather than waiting until the month before it has to go to the accountant. We are using a monthy budget for the first time now, and that makes thing so much easier.

Krantcents January 17, 2013 at 5:46 pm

A little organization means more control over your finances. Congratulations, you will make yourself much more effective and achieve better results.

My Financial Independence Journey January 17, 2013 at 7:10 pm

I usually use the year end/beginning time to set up some personal, professional, and financial goals for myself. I also make the next year’s budget.

I’m confident that as my personal, professional, and financial lives become more complicated, I’ll probably have to add more things to my list. But for now, this seems to be working for me.

Krantcents January 17, 2013 at 7:28 pm

These suggestions are more organizational versus accomplishment oriented.

Eric J. Nisall - DollarVersity January 18, 2013 at 5:50 am

It’s really important to have a plan for anything, and continually doing the things you hilight for yourself certainly makes it easier going forward. I always wonder why it is that whenever people makes lists of things they want to accomplish, living or at least enjoying life is never a point. Sure, it’s great to have your finances in order and all, but if you aren’t using any of that stuff, what is the point of having money? It’s not like anyone can go swim through it like Uncle Scrooge and it certainly won’t be of any use if people aren’t physically (or mentally) able to do anything to enjoy it, and most certainly it it isn’t any good once we’re dead.

Krantcents January 18, 2013 at 7:02 am

Extreme (diets, savings etc) anything can not be maintained! Like all of life, you need balance. This is one of the reasons, I travel overseas every other year, take vacations and now go away a few weekends a year too.

mbhunter January 19, 2013 at 11:22 pm

“You either prepare for 2013 or plan to fail!”
So nice, you said it twice!

Krantcents January 20, 2013 at 9:26 am

Being a lifelong planner professionally and personally, I believe you just cannot wing the big stuff. If it is important enough to set a goal, you need a plan to make it happen. If you don’t plan, you plan to fail!

Darwin's Money January 20, 2013 at 11:58 am

It’s a good time of year to do this stuff too because of all the annual tax law changes. This year alone, we have the return of the full payroll tax, obamacare taxes and some other changes. Also, if eligible, now’s a good time to always try to get some money in the Roth IRA from last year’s tax year – ok to do so until April.

Krantcents January 20, 2013 at 1:13 pm

Now is great time for starting a lot of things, but why wait for a particular time. They are all annual things some of which can be done anytime.

Grayson @ Debt Roundup January 20, 2013 at 3:21 pm

I always take a new year to reflect on what I did in the previous year and see how I can succeed in the new year. 2013 will be no different, and thanks for the great tips.

Krantcents January 20, 2013 at 5:11 pm

Thanks, reflection is really important because looking over your performance will help you plan the future better. I try to do it often.

Elizabeth @ Broke Professionals January 20, 2013 at 5:00 pm

Personal development is a big one for me this year. My husband and I are preparing for a move back to my home town, which will necessitate a change in jobs (and maybe career) for my husband. I’m also contemplating a move back to full-time – albeit a “telecommuting” – job, which I think will be better for me in the long run.

Krantcents January 20, 2013 at 5:13 pm

Wow, a move and job change! Two big changes at once. Planning willl be an important part of that. Good luck.

Miss T @ Prairie Eco-Thrifter January 20, 2013 at 6:32 pm

We are in the get organized mode. This applies to our house, our stuff, our money, and our time. We are really trying to get things more under control and running more smoothly.

Krantcents January 20, 2013 at 6:34 pm

May I suggest to set priorities! Trying to everything at once is a little over whelming. Good luck.

Brick By Brick Investing | Marvin January 21, 2013 at 12:31 pm

I really like the personal development tip. An individual must continue sharpen and hone their skills in order to maintain relevant in their industry. All too often I have seen people become “comfortable” with their situation and consequently lose their edge.

Krantcents January 21, 2013 at 1:28 pm

As you get older, your skills can get stale or out of date particularly in technology. My wife is required to take classes every 2 years to maintain her RN license. It is probably a good idea for everyone.

Marissa @ Thirtysixmonths January 22, 2013 at 2:51 pm

I normally try to get everything to my accountant before the end of the year, and send over the rest of the docs as soon as they come in.

My accountant keeps me sane.

Krantcents January 22, 2013 at 3:49 pm

I bet he/she appreciates that! I use my accountant as a way to keep me in line otherwise I might be too aggressive.

Suba January 23, 2013 at 11:36 pm

Our new year ritual consists of (financially) -
-Self appraisal, on how well we did on our goals the previous years.
-New goals set up
-Negotiate all the contracts to bring down expenses
-Organize our tax papers
-Plan for that year charity goals

Krantcents January 24, 2013 at 7:48 am

good job! I like to start the year off organized because it is a lot easier to maintain. Some of my suggestions can be done anytime though.

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