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How to use your year-end credit summary to set new goals

Dawn Papandrea

How do you plot a brighter financial future? For me, it helps to look into the past. My credit card year-end summary can be eye-opening, frightening and useful for setting goals.

If your card issuer offers a year-end summary, study it. You can see how much you spent in various categories, how much interest you paid, even how many rewards dollars you redeemed.

For example, here is a quick look at my financial stats:

Debt load

Are you in better financial shape than you were 12 months ago?

The good: I’m free of credit card debt, and had my home appraised and was able to remove PMI from my mortgage.

The could-be-better: We purchased some new furniture that I intended to pay off in full, but I went with the no-interest monthly payments instead. I’m also working to pay off some lingering medical bills.

Savings

Were you able to save over the course of 2017, whether it was your emergency fund, your retirement accounts or your child’s college savings accounts?

The good: I made contributions to my children’s college funds. And, I already socked away money for this year’s summer vacation.

The could-be-better: I was able to fund my SEP IRA a bit, but not as much as I would have liked. I have until April’s tax deadline to contribute some more. We also had to deplete our HSA account to cover medical bills, so we have to start over to build up that account. My emergency fund is solid, but with the unsteady income of a freelancer, I really want to add more to it.

Earnings

How much income did you bring in last year, and were you happy with it?

The good: Income was up. Hooray!

The could-be-better: Perhaps I needed to pay a bit more on my quarterly taxes? Uh-oh. I also never got around to doing the decluttering thing where I sell my old junk online. (Adding this to my 2018 to-do list!)

Spending

Finally, where did all of that hard-earned income beyond the obvious bills go last year?

The good: I was more purposeful about using my credit cards to earn rewards, and although I carried a very small balance throughout the year, I paid very little in interest. When all was said and done, I came out $200+ ahead in cash back versus interest that I paid.

The could-be-better: You don’t want to know what I spent on concert tickets and restaurants last year. I mean, the number is staggering – do I really love nachos and hibachi that much?!

The tickets I don’t regret, but the take-out and just-because dinners really did add up to inappropriate levels. Yikes!

I also realize that I didn’t max out the grocery reward category on my everyday card because I tend to pay cash or use my debit card a lot of the time.

Fiscal emergencies can strain finances

One last big learning from 2017: As diligent as you are, you never know what life will throw at you.

For me, it was an unexpected health issue that resulted in five-figure medical bills. Luckily, it did not compromise my care or cripple my finances (and I’m now in perfect health, thankfully!). But it very easily could have gone another way.

Financially speaking, the experience really changed my mindset, and it made me even more committed to building a bigger financial cushion in my emergency fund.

Looking back to set new goals

My other goals are to stay the savings course, spend less on dining out, look for new income streams and figure out how to fit my son’s upcoming private high school tuition into my budget.

Once you analyze your year-end summary, you, too, likely will have accomplishments to tout and shortcomings to regret. As long as you’re honest with yourself, though, you’ll be able to set some real, attainable financial goals for the remainder of this year.

If you have more “needs improvement” areas than highlights, don’t fret – I was right there with you not long ago. Just pick your major area of focus, whether it’s paying off debt or opening a savings account for the first time, and go for it.

Here’s to a financially successful year all around!

See related: Financial resolutions can make you feel betterCharged Up! podcast: Making your financial goals stick,

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