As the year comes to a close, financial experts encourage reflecting on your financial habits and identifying areas for improvement. Although economic pressures and wage stagnation may have made managing finances challenging, experts emphasize the importance of self-compassion and avoiding excessive scrutiny.
The end of the year is a time of reflection for many, and while some will look back on their experiences and achievements, money experts say it’s just as important to take stock of your finances. Staying on top of your spending may have seemed like an uphill struggle this year as wages have often failed to keep up with the increased cost of living. In the U.S., Bankrate’s found that between January 2021 and June 2024, prices increased 20%, but wages only rose by 17.4% over the same period.
As a result, nearly half of Americans say they are living paycheck to paycheck, according to a recent survey. The end of the year can be a great time to reflect on your finances, but it’s important not to be hard on yourself,” Tamara Harel-Cohen, co-founder of financial wellbeing app RiseUp, told CNBC Make It. Harel-Cohen advised against scrutinizing every penny spent because it's not possible to always meet your financial goals. Meanwhile, Sarah Coles, head of personal finance at Hargreaves Lansdown, said there’s always room for improvement where money management is concerned. “It can feel that as long as you get to the end of the year roughly in one piece financially, you’re probably OK. However, this approach leaves you vulnerable to neglecting key aspects of your finances,” Coles said. CNBC Make It asked four financial experts for their top tips on reflection and money management as the end of the year approaches.It's a “common phenomenon” in December for people to feel ashamed about how they handled their money, Vicky Reynal, a financial psychotherapist and author of 'Money on Your Mind,' told CNBC Make It. “One thing that I would say is to have self-compassion,” Reynal said. “There’s almost a sense that everybody feels they should be better than they are.” This can stop us from thinking productively about how to turn things around, Reynal said
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End-of-Year Financial Reflection: Experts Offer Tips for a Healthier Money MindsetAs the year draws to a close, financial experts emphasize the importance of reflecting on your financial habits. While acknowledging the challenges of rising costs and stagnant wages, they encourage a compassionate approach to self-assessment. Four financial experts share their top tips for effective money management and overcoming common feelings of shame or inadequacy surrounding finances.
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