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 2024 Wage to Inflation Index 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 Bank of America 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. The truth is that managing finances is “not an innate skill,” and it’s often not taught by schools or parents.

“So we pick it up as we go, and we’ll inevitably make mistakes. But all we can do is, rather than simmer in in guilt and shame, we can use that and reframe it in terms of: What can I do differently? What do I want to do differently next year financially?” Reynal added.

Hargreaves Lansdown’s Coles suggested an audit of five key money areas.

“We should specifically take stock of the five cornerstones of sound finances: Are your short-term debts under control? Do you have the right things in place to protect your family – including life insurance and a will? Do you have enough emergency savings to cover three-to-six-months’ worth of essential spending? Are you on track with pension saving? And are you investing to make more of your money where you can?” she said.

Understanding where you are financially within these five key areas can help you create the foundations of a budget and new money goals, Coles added.

A lot of money resolutions in the new year fail because they tend to be overcomplicated, according to Reynal.

“People, sometimes, will come proudly to me and say: ‘I’ve set up this spreadsheet, it’s 30 tabs. I’m going to be recording all my expenses.’ But that’s not sustainable,” Reynal said. “I would always encourage people to keep it simple and find the right tools.”

She suggested using budgeting apps and investment platforms that cut out the work for you.

“It will simplify and enable a cycle in which you’re feeling empowered. You’re getting small wins, and that kind of perpetuates a virtual circle in which you’re starting to build confidence that: ‘Look, I managed to do it this month, and so maybe I’ll manage to do it next month,’” she added.

Harel-Cohen agreed, saying even a “five-minute check-in” with yourself in the morning about how you’re going to spend money during the day will help you make better decisions without feeling overwhelmed.

“Remember, improving your financial wellbeing is a marathon, not a sprint,” Harel-Cohen added.

The second reason that many money resolutions fail is because they’re too ambitious, according to Reynal.

“There’s a lot to be said about small wins in terms of building confidence, building a sense of agency, and building momentum,” she said, adding that setting “small, actionable goals,” is the route to success.

Harel-Cohen advised automating monthly payments into your savings account to achieve long-term goals such as holidays or retirement.

She said: “After setting this up, just sit back and forget about it.”

It’s okay to treat yourself on occasion too, according to Ylva Baeckström, a senior lecturer in finance at King’s Business School.

Spending money shouldn’t always be anxiety-inducing, she said. “What did you really spend on things you don’t really need? And how did it make you feel spending that money? Did it make you anxious or stressed or did it make you feel good?” Baeckström said.

“If it made you feel anxious you need to change your habit. However, if it made you feel good, it may be worth continuing to allow yourself this particular luxury. Allow yourself some treats that make you feel good and cut the spend that makes you feel anxious,” she added.