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7 Money Moves you Should Make Before the End of the Year 
Money Management

7 Money Moves you Should Make Before the End of the Year 

2022 is finally ending, meaning you just need to make a few financial moves to end it on a high note. And what’s better than giving yourself a financial performance review, reflecting on how you used your money, and planning for 2023? 

Consider the case of 33-year-old Damaris. She planned to lower her car loan to less than Ksh200,000 by the end of 2022. But after reviewing her finances, she realised that she was Ksh20k from achieving her goal. Damaris wanted to live up to the promise she made to herself. So she postponed her December vacation and used the money to reduce her loan.

Without looking deeply into her finances and finding ways to cut costs, Damaris couldn’t accomplish her goals. You might not have the same problem as her, but making the right moves just before you break for the holidays might give you a chance to repair any damages in your finances.

Here are seven money moves to help you end the year with a bang.

Review your Budget and Spending Habits

Did you spend money wisely and intentionally this year? There's only one way to look at it: by reviewing your spending habits. While it might seem small, your spending habit can significantly impact your finances. It can be the reason you save more or go into debt.

Spending habits are part of your money personality. They are behavior patterns that are almost involuntary and hard to break. Whether you are a spender or a saver, you need to review your habits at the end of the year to ensure that you have accomplished your goals and are on the right track. You can do this by

  1. Looking at how much you've saved - If you don't save at least 20% of your monthly income as recommended by the 50/30/20 budget rule, you might be spending too much.
  2. Reviewing your budget - Your budget allows you to control and track your money. Review it to see if it served you well
  3. Checking your big purchases - What did you spend the most money on this year? Was it something that you needed? Is it generating you income? Or you just make big purchases to show off and keep up with the Joneses. 

Reviewing your budget and spending habits can help you know if you are on the right path and what actions to take next year. It also gives you room to perform self-improvements and aim higher. For instance, if you saved 23% of your annual income this year, you can create a new plan to increase that to 27% next year.

Read Also: 6 ‍Simple Steps to Create a Working Budget‍

Calculate your Net Worth

One way to measure if you have financially progressed is to calculate your net worth at the end of the year. It can’t paint a complete picture, but it can indicate where you are headed financially. It can also help you plan the steps you need to take the following year.

Net worth is calculated by subtracting what you own (your assets) from what you owe (your liabilities). Ideally, the difference should be a positive number. The sum of your assets with momentary value should be higher than your liabilities, such as debts, unpaid taxes, and money loaned out.

If your net worth is positive and better than it was a year ago, you are headed in the right direction. And if it has dipped or has a negative value, you might want to ask yourself why. 

Negative net worth isn’t necessarily bad. Maybe it is because you took out an equity-building loan like a mortgage or bought an asset that will take time before they start contributing to your net worth. If this is the case, you have nothing to worry about.

But what if your net worth has dropped due to overspending, deferring payments and bills, taking on consumer debt, and giving out unsecured loans to loved ones? That might indicate a problem, and you need to change your finances for the better ASAP.

Read Also: 4 Money Resolutions To Build Wealth & Spend Less

Review your Retirement Plan

Retirement is inevitable. It will reach a time when you won’t have the energy to work. And when you reach that age, you will still need to support yourself by paying all your bills. 

Retirement planning allows you to build wealth and income-generating schemes that will help you support yourself in your sunset years. Without it, you will struggle financially and be forced to depend on others. With this in mind, it makes sense that you should review your plan at least annually.

Reviewing your retirement plan annually has many benefits, 

  1. It helps you ensure you are on track to achieve your goals like the age of retirement and how much you need to save by the time you are ready to leave the workforce
  2. It gives you a chance to correct any mistakes you might have made in your plan unknowingly 
  3. It allows you to update your plan if you have experienced major life changes like getting married, having a child, or divorcing. 
  4. It helps keep your retirement in sync with your estate planning.

Read Also: 7 Reasons Why You Should Never Make Your Children Your Retirement Plan 

Rebalance your Portfolio 

A lot can happen with your investments within a year. Consider the case of Aaron. At the beginning of the year, he invested Ksh500,000 in stocks of different companies, MMFs, and treasury funds. Right now, his total investment is worth Ksh580,000. 

However, his investments have drifted. He profited from some and lost money on others. Aaron’s asset allocation is not the same anymore, and he needs to return it to its original form. And to do that, he has to rebalance his portfolio.

Performing asset allocation at the end of the year allows you to clean up your investments. You might have to liquidate some of your assets, eliminate those underperforming, and reduce diversification risk.

Finally, consider your goals and current needs when rebalancing your portfolio. For example, if you plan to make a significant investment later next year (like buying land), you might have to keep your money in low-risk liquid investments. This will ensure you preserve cash and won’t struggle to raise money when you find the right plot to buy.

 Read Also: 7 Common Investing Mistakes To Avoid

Review your 2022 Resolutions and Establish your New Year Goals

Remember at the start of the year when you promised to start an emergency fund, invest more, and start a business? Well, the time to hold yourself accountable is finally here. Go through the financial resolutions list you made and start checking what you accomplished and what you didn’t.

Suppose you achieved all your resolutions; congratulations! But it is now time to aim higher. Use this chance to set new year resolutions that challenge you. For instance, you can think about kickstarting your homeownership journey or paying off all your consumer debts. You can also take steps to improve your career, like enrolling for a master's degree.

If you didn’t achieve your goals, it is time to reflect. Go through your finances and establish why you didn’t. Was it self-inflicted, e.g., you couldn’t change your bad financial habits? Or was it because major events like loss of employment prevented you? Depending on what it was, plan on how to avoid those pitfalls as you set your 2023 financial resolutions.

Read Also: 10 Money Resolutions you Must Make in 2023

Update your Will

Preparing a will and planning your estate is something everyone looking to protect their wealth and dependents should do in case of their demise. But how often should you update your will? Ideally, you should do it anytime you experience major personal or financial changes. These changes can be:

  1. Health issues 
  2. Financial windfall such as inheritance or winning a lottery 
  3. Change in marital status
  4. Change in the number of your heirs 
  5. Lost your previous will

For some people, this change can happen very often per year. And updating your will three or four times per year can be a lot of work. Therefore, it's essential that you add this exercise to your to-do list at the end of the year.

Think back on all the significant changes in your life during the whole of 2022 and figure out how that can affect your existing will. 

Read Also: 6 Financial Steps to Take When Making a Big Life Change

Celebrate your Wins and Learn from your Mistakes 

How did you perform after reviewing your finances? Did you accomplish what you set out, or are you in a worse position than you were when the year started? The path to financial security is a bumpy one. Some years you will win, and others will be challenging. 

If 2022 has been of those years that everything has gone according to plan, you owe yourself a celebration. And no, don’t go on a spending spree and undo all you have accomplished. Find financially smart ways to reward yourself without wasting money. Celebrating your wins can motivate you to go harder next year.

And if 2022 wasn’t that great, don’t beat yourself up. Recognise where things went wrong, your mistakes, and what you could’ve done better. Remember, mistakes are not always the end of life. Once you own them and commit to changing course, you can turn your finances around. Use the holidays to create an actionable plan and SMART goals to help you succeed next year.


For most people, the last month of the year is a time for reflection. A time to put things into perspective and correct any mistakes they might have made. After all, who doesn’t want to start the new year on a clean slate?

As you review your finances, avoid rushing decisions or taking actions you are unsure of. You can consult a financial manager or conduct independent research.

Finally, consider these moves as a financial house-cleaning exercise. Look into all the aspects of your personal finances and ensure everything is in order. Then record everything diligently so that 12 months from now, you will have a reference point when you travel back to repeat these exercises.

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Farah Nurow is an experienced Content Writer who enjoys writing creative and educative articles meant to provoke readers' thoughts. He loves sunny weather and thick books. You can connect with him on LinkedIn.

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