6 Things You Must Do Before 2026 (Financially)

So it's that time of year where people are starting to wind down. But if you use these last few weeks wisely, you can get a massive head start in the new year and make the next year your best financial year yet. If you're new here, hi, I'm Nisha. I'm a former investment banker turned financial educator. And every December, I do what I call a money reset. And in this video, I'm going to share exactly what that looks like so you can do the same. Starting with the very first thing, your money wrapped. Here's something I do every December without fail. And it completely changed how I think about my money and how I plan for the next year. So the idea is you're doing a Spotify wrapped, but for your money. So you know how Spotify wrapped breaks down your listening habits in numbers. The hours you spent with your favorite artists, the songs you had on repeat, the ones you're slightly embarrassed about that made the list. What if you did the same thing with your money? A year-end snapshot that shows exactly what your spending habits are. This isn't the most fun exercise, so you want to make it a little bit more enticing for yourself. Get a hot chocolate, a mulled wine, sit somewhere cozy that you enjoy and pull up your bank statement or budgeting app. And the idea is to understand the answer to these three questions. What was my net income for the year? What was my expense number for the year? And what was my surplus slash deficit this year? Surplus being, did you spend less than you earn in which case you had money left over, i.e. a surplus, or did you spend more than you earn in which case you'd be in a deficit? So to give you an example, say my salary after tax was 2,900 a month, plus some rental income, plus some extra income from dog walking or another income activity that I did on the side. Tally those up for the year and that would be my total income. Then I break down my expenses, fixed costs first, rent, groceries, car payments, all the must-haves that keep your life running. Then the fun stuff. So shopping, dining out, subscriptions, entertainment. And now this bit, this is where I do something a bit different. Most people list their savings and investments separately from spending. That has its own category. And normally I do too, especially when I'm doing my monthly budgets. But for my yearly money wrapped exercise, I put my savings and investments as a spending category. I put it along with all of my other spending. Why do I do this? Because if I count my savings and investments as spending, then when I calculate my surplus at the end of the year, I'm seeing money that's truly leftover, money I didn't spend and didn't already save or invest. So if I've got 500 surplus, that's not money I've already put away. That's 500 sitting there that could have been working for me. That tells me that I could allocate that money and give it a purpose, even increase my monthly savings, potentially by about 200 next year on a monthly basis, without it even hurting. But if I keep my savings separate and just saw this as a 500 surplus, I wouldn't know if that was genuinely extra money or if I was just patting myself on the back for money that I'd already saved. So that's why I put it together and then figure out a surplus number at the end because that's the bit that shows you your untapped potential. And then once you do this for the entire 12 months, you see the numbers all in front of you and you'll start to see different patterns emerge. Maybe you spent a lot more in winter months. Maybe it was too much time indoors. Maybe it was emotional spending. Or maybe you spent more in the summer months. It was weddings, holidays, festivals all hitting at once and you actually went into a deficit. These aren't random. When you look at your numbers like this, you're able to spot patterns. And the more that you can spot these patterns in your numbers and tie them back to your emotions and your spending habits, the more in control of your financial decisions you are. This piece is all about financial awareness and understanding where your money went on a month-on-month basis over the year, but also whether you ended the year on a surplus or a deficit. By the way, this specific tracker, it's part of my financial well-being toolkit. It comes with a full dashboard and a 10-part workbook. You can find all the details if you're interested in the description box below. Moving on to part two, which is doing your yearly audit. According to a survey done by Deloitte, the average US household pays for four streaming services totaling around 69 a month, which is over 800 a year. That's just on movies and shows. That might not sound too bad at first, especially if you spend a lot of time watching TV, but how many of us can actually say that we use all the services that we pay for? I'm nearly certain that if you're watching this, you have at least one subscription that you've paid for that you've forgotten about. Whether it's for an app that you bought months ago, whether it's a gym membership that you've barely used, whether it's a streaming app that we've only downloaded to watch one show, maybe even a random subscription that we signed up for during a free trial and never canceled. These just quietly chip away month on month, and over the year, it can really add up. So this is your reminder to go through every single recurring payment, subscriptions, memberships, streaming platforms, software, online tools, apps, and cancel or pause anything that you're not using right now. There's nothing wrong with paying for things that genuinely bring you joy or make life easier, but you actually need to be using them. Once you've done that, you can move on to your bigger bills, things like your phone, broadband, insurance. This is where the real savings are. And nowadays, it takes less than 10 minutes to see if you're on the best possible insurance. And in fact, car insurance is probably the biggest one. They bet on the fact that you won't switch. So they slowly creep up your rates each year until you're paying way more than you should be. So just follow the one-year rule. Every one year, compare offers to make sure you're not overpaying. The best way to do this really quickly is to go onto a comparison website. There's one that I recommend below. It basically will check if you can get your same coverage for way cheaper. That brings me to the third thing you need to do before the year ends, and that is rebuild your financial foundation. So now that you've trimmed the waste, it's time to lay the foundations that the rest of your financial future is built on. So starting with your emergency fund, do you have enough to cover three to six months of expenses? If you had that at the start of the year, did you dip into it? Is it still the same amount? You might have saved a solid rainy day fund years ago, only for your income or expenses to have increased since then. So this could mean your savings might not last half as long today as they would have done five years ago. So if your rent or mortgage payments have gone up, if you're leasing a car, or you've got a dog or kids now, your emergency fund probably needs a top-up. So that's the first thing you want to look into. Once that's sorted, take a look at how much you have saved in cash versus how much you have going towards your investments. Because you don't want to sit on a huge pile of cash above the amount that you've already saved for your emergency, because inflation will quietly eat away at its value. On the flip side, if you've got every penny tied up in investments, the last thing you want is to have to sell your stocks, possibly at a loss during a financial emergency. There's no perfect ratio on how much you need in cash versus how much you need to invest. But as a rule of thumb, anything that you have in cash that is above your emergency fund, and it's money that you don't need in the next five years, you really should be thinking about investing that. Because you will make a lot more through investing it than you potentially would just putting into a high-interest savings account. A few small adjustments now before the year end can set the habits for future years that will really add up to thousands over time. Number four, and this is all about making sure you're utilising your free money and not leaving it on the table. So before the year ends, there's free money probably sitting on the table with your name on it. I'm not talking about future investments or gains or potential returns. It's just about actual money that is yours to claim. And most people just leave thousands on the table every year because they either didn't know that these opportunities existed or they think it's too complicated, but it's not. So I'm going to walk you through the big ones that you want to look into and make sure you're utilising. First, max out your employer benefits if you haven't already. Millions of people are opting out of their workplace retirement schemes that are available through their employer, which literally means they're turning down free money from their employer. This is the easiest form of free money in terms of anything investing that I speak about. If your employer offers a retirement match, just contribute enough to get that full match. It's literally free money and a 100% return on your contributions. So before the year ends, just check you're enrolled, contributing at least enough to get that full match. Next, use your tax allowance before they reset. So most countries give you a tax-free allowance each year and those allowances, they don't roll over. So you use it that year or you lose it. So you want to find out when your financial year ends. In Brazil and in more than 100 other countries, it matches the calendar year from January 1st to December 31st. In the UK, it's April 6th to April 5th and in the US, it runs from October 1st to September 30th. So mark that date in your calendar and make sure you've used whatever allowance applies to you. If you invest in taxable accounts, you also want to consider tax loss harvesting. This is when you sell underperforming investments to offset capital gains elsewhere. So it's not about striming the market, it's just about being smart with what the tax system lets you do. If you've got investments sitting at a loss, selling them before year end, if you know that those investments are very likely to recover, then you could possibly reduce your tax bill. Then if you donate to a charity, you might as well make a count. In the UK, charities can claim back the basic rate of tax that you've already paid through gift aid. So if you're a higher rate taxpayer, you could claim back the difference on your tax return. In the US, charitable donations to specific eligible organizations can also reduce your taxable income. Finally, you want to find out when the financial year runs for where you live and based on that financial year, you want to make sure you're using up your tax allowance before that financial year ends because the end of the financial year is often when a lot of these tax allowances reset. So to avoid missing out on any of those tax advantages, just make sure you know which dates apply to you. Number five, set clear financial goals for the next 12 months. Once you've got the basics covered, you've looked at the past, you've looked at what you've done, now it's time to look ahead. Think about what do you actually want your money to do for you next year. So not vague things like I just want to be better with money or I just want to save more but something specific that would genuinely make a difference and that you could track month on month. So that might mean saving for a house deposit, paying off a credit card, building an emergency fund, setting up your first investment account. Whatever it is, pick one or two goals that matter most to you and write it down and ideally put numbers next to them. So if you want to save $6,000 by December 2026, you would say I want to save $6,000 by December 2026, that's $500 a month. If that feels like too much, either cut the number in half or extend the timeline. The point isn't to hit the goal or hit perfection, it's just to give your money a direction and to give you a direction as well so you know what you're aiming for over the next 12 months. So again, an example of how to do this, first look at your projected income. So your monthly salary for the next 12 months, any side income that you're expecting, then put in how much you plan to save and invest each month. This would be a lot easier now because you've already done the last 12 months and that would be a basis that you can then build off. It won't be completely shooting in the dark. And then you want to put in the rest of your spending categories. The aim here is to give every pound, dollar, euro for the next 12 months a purpose and you want to do that in advance because if you don't have a plan in advance, you will just be spending on the fly and your money will very, very easily be slipping through your fingers. And here's the key bit, if your goals do change halfway through the year, you can just adjust these numbers. Maybe you get a raise, maybe you have an unexpected expense that comes up partway through the year. You just need to update the track or whatever it is you're using to manage your finances and you'll instantly see how it could affect your end goal. This whole thing, it maybe takes like 20 minutes to set up but once it's done, it's such a relief because you've got such a clear financial roadmap for the entire year ahead of you. It doesn't mean you need to stick to it but it just means you're not guessing or hoping you actually have a direction of where you're headed. And when your goals are clear, so clear, the rest of your money decisions just get a lot easier. Another way to achieve your goals faster is to learn how to solve problems more effectively. And that's exactly what today's sponsor, Brilliant, helps you do. Brilliant is an interactive learning platform that helps you finish every day smarter than the last. You can master a range of topics such as maths, science, computer science and it does it in a very, very simple, easy to understand way. I've been exploring their everyday maths course just to keep my mind ticking and it's honestly fantastic. It's brilliant. It takes a kind of maths that shows up in real life like percentages and it makes it easy to connect those ideas in a way that manages real life scenarios in our day-to-day. One of the things I love most about it is that there's absolutely no need to sit through long lectures or force yourself to read textbooks that send you to sleep. Instead, you'll learn by completing very small guided challenges. It really does feel personalized as well because you'll start at the right level for you and then you move forward at your own pace meaning you'll neither feel behind or like the content's too easy for you. And the best thing of all, it's built by teachers and researchers from MIT, Harvard and Caltech. So you're learning from some of the best minds in the world but in a way that feels practical, human and not intimidating. So you can learn completely for free on Brilliant. Go to brilliant.org forward slash Nisha or you can scan the QR code on screen or click the link in the description. You can go through all the content completely for free and if you want to continue, Brilliant are also giving our viewers 20% off an annual premium subscription which gives you unlimited daily access to everything on Brilliant. And moving on to number six This is where everything you've done so far comes together. You reflected on how you spent your money, you've made some adjustments, you've built a safety net, you've set your financial goals for the next year. Now it's time to make that all stick and actually execute on those plans. And you do this by creating a very simple system that keeps your finances running in the background in a way that doesn't have to rely on willpower because goals are great but let's be honest, life gets busy. And if your plan depends on remembering to move money around every month, it's probably not going to happen very consistently. So before January starts, build your money operating system. Think of it as automating good decisions so they happen even when you're tired, even when you're distracted, even when you're busy doing literally anything else. So start with automation, set up standing orders for transfers to your savings, to your investments and to your pension or retirement plan. Then schedule bill payments for the same day each month, ideally right before payday. So you're saving and investing before you even see what's left in your account. That one small change, saving first and spending what's left will do more for your long-term finances than any budgeting app ever could, honestly. You can also automate contributions to sinking funds. These are smaller saving pots for predictable but irregular expenses. So things like car maintenance, holidays, birthdays, annual insurance payments. By putting a bit aside each month, you'll avoid those stressful big bill moments that just blow up your budget. It's more easier to stay on track. Next, you want to remove as much friction as possible. So James Clare, the author of Atomic Habit says, my wife keeps a box of greeting cards that are pre-sorted by occasion. Birthday, sympathy, wedding, graduation, and more. Whenever necessary, she grabs an appropriate card and sends it off. She's incredibly good at remembering to send cards because she has reduced the friction of doing so. That is the mindset you want with your money. Set up your environment so it's easier to make good financial decisions than bad ones. For example, keep your emergency fund in a separate bank so you're not tempted to dip into it. Link your investment account directly to your main bank so moving money takes seconds, not effort. Unsubscribe from retail emails that tempt you to spend impulsively or keep your savings app on your home screen so checking your progress is as easy as opening Instagram. Basically, the less friction your system has, the more likely you are to stick with it even when you're not thinking about it. Finally, create a simple money dashboard. This is a really quick way to see everything at a glance. It doesn't need to be complicated. It could be a Notion template. It could be a spreadsheet. It could be a page in your Notes app. But just make it really easy to track your finances and see everything at a glance through it because when you can see progress, even small progress, it builds motivation and motivation is what keeps your system alive even when the initial excitement fades. That money operating system, it doesn't need to be perfect and set up from the first day. Just start with one or two automations straight after you've watched this video. See how they feel and if they feel good over the next one week, add more over time. Because really, the end goal isn't to think about money all the time. It's really to just set things up once so your money quietly does its job while you get on with living your life. It's meant to add to a good life, not take away from it. So before you pour the champagne, just take this afternoon to go through the six things that we've spoken about because just taking a couple of hours can go a long way to help you start the new year feeling calm, feeling organized and feeling in control with your money. If you found this video useful, feel free to share it with someone who wants to start next year on the right foot. And if you want to keep the momentum going, you might also like this video right here where I show you the five minute habits that I use to save me over 25 hours a week. Hope you have a brilliant end to the year and I'll see you next week.