The year is quickly coming to an end. As the holiday season descends upon us it’s easy to get caught up and distracted by the fun of that time of year and forget about the importance of looking at your current financial picture and evaluate economic indicators so that you can create a plan for the upcoming year.
Perhaps your work situation has changed and you’re now self-employed and have been procrastinating on opening a retirement fund. If that is the case, you have time to do some extensive research and open a retirement account that you can contribute to for the current year up until April of the 2016.
You may need to adjust your spending habits or look at your budget and make some changes in order to meet this goal. If you are already investing take some time to evaluate if your investments are performing as well as you would like, along with following some economic indicators.
Ask yourself if your investments are allocated in a way that you feel comfortable with. Look through your current portfolio and see if you’re paying too many fees. Do you understand your investments? If not, schedule an appointment with whomever you’re working with on your investments before they go on an end-of-year vacation.
Economic indicators to watch
If you’ve been vaguely following the economic indicators a lot has been going on that affects your money’s growth.
Examples of economic indicators include:
- Oil prices going down as a result of current Saudi Arabian and U.S. oil output. We are now saving money on gas purchases, which gives most consumers a good feeling psychologically after years of feeling the pinch every time we purchased gas.
- Last month’s scary drop in the stock market. For many this drop was seen as a scary event because many people are more short-term focused than they realize. For other investors the stock market drop indicated that it was a good time to purchase more stocks at a lower price with the intention of holding those stocks until they increased in valued.
- Recent data on job growth on a month-to-month basis for the United States. If the growth is lower than expected that may also have an affect on investor confidence.
Taking time in November to see where your investments stand gives you an opportunity to finish the year with a better sense of what is happening with your money. It’s important to evaluate your retirement investments at least a couple of times a year so that you have a better idea of how your investments are (or aren’t) growing.
Being proactive about your money, your financial education, and taking the time to address those issues sooner rather than later will help you make informed decisions as to what your next steps will be going into the New Year.
Managing your investment portfolio and looking at economic indicators is a very part of a person’s financial education. It is an ongoing process that can create a sense of anxiety in most people. Embrace the discomfort but give yourself time to learn more, save more, and know more about what you’re trying to do.
Michelle Jackson is a personal finance and lifestyle blogger sharing her story at The Shop My Closet Project. Her goal is to help people cultivate their best life. When she’s not blogging or podcasting for Girl Gone Frugal you can find her riding her bike, going for coffee, or hiking in the mountains.