As we toil through the final month of the year, it could be a good time to recalibrate and reassess our own financial positions and habits. You know, before everyone starts doing it on 1 January (new year, new me) and it stops being cool.
So with that sentiment in mind, let's discuss three financial moves that I think everyone should make before the end of the year. Before all of those dreaded New Year's resolutions come out of the woodwork once again.
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3 financial moves to make this December
Take a look at your debts
Christmas is a joyous time of year. But it is also an expensive one, as any adult would be acutely aware of. Unfortunately, this can lead to many people paying debt in order to fund the silly season's expenses. Whilst no one should judge anyone else's financial position in my view, the fact remains that debt of this kind can be extremely dangerous to anyone's financial health.
So if you're using a buy now, pay later service, or even worse, a personal loan or a credit card this December, make sure you pay it off as soon as you can. These loans and cards often come with extremely high interest rates, so if you can't afford to pay them back straight away, don't do it.
Do you have enough money put away for that rainy day?
Building on what we've just talked about, another thing to do this December is assess the state of your emergency funds, or rainy day jar in the old parlance.
Not only is Christmas an expensive time, but it is also a relatively dangerous one (ask any emergency room worker). The kids are on school holidays and we're all travelling around more than usual – a perfect recipe for unintended expenses.
The only thing that will ruin your Christmas more than an unexpected medical or vehicular bill is the lack of funds to pay for it. As such, I think right now is a prudent time to assess whether you have enough cash stashed away for a financial emergency. You might find that your rainy day fund is more deserving of a top-up than that post-Christmas trip to Thailand.
Are you investing?
Last but not least, let's talk about investing. I always recommend that anyone who isn't currently investing in ASX shares do so at the start of every new year. But why not get going early before everyone else does?
Put simply, investing in ASX shares offers everyone a chance to build meaningful wealth. It may not (and won't) happen overnight. But most years that you own quality ASX shares, your wealth will increase.
There are so many reasons to invest in shares. There's the low upfront cost (particularly pertinent given property prices). There are the considerable tax advantages. And there is the simple joy of owning a piece of a quality Australian business. If you don't fancy finding an individual company to invest in, a perfect, bottom-drawer alternative would be a simple index fund, as I've discussed before.
So if you don't already invest in shares, why not give yourself an early Christmas present?
