Tips for an Annual Financial Checkup

Middle age couple looking at their financials during an annual checkup

Evaluating your financial standing annually will help keep your money and assets healthy, and ensure you’re on track with managing your money. Here are some tips to help you assess your finances each year.

Update Your Budget

If you have a budget, update it with any changes. If you didn’t make a budget last year, create one as soon as you can. Your budget is one of the most important components for managing your finances. Build one on paper or use a budget software which should help you create one, and will link your bank accounts and credit cards. Make sure to review your budget at least once a month to make sure you are sticking to it. You should have a positive balance every 30 days. If your budget is in the red, adjust your spending categories to get it back in the black. Once you’ve created a budget you can stay on track with, you’ll be able to use any surplus money towards your goals, such as savings or debt payoff.

Reassess Your Goals

One of the first steps in your financial checkup should be to evaluate your progress toward the goals you set last year. Goals are checkpoints that allow you to measure your financial progress. Have you made progress on them in the last year? Did you fall short of achieving them and why? Have your goals changed? You should be making steady progress toward reaching your goals. If you aren’t, you may also need to alter your action plan to help you accomplish your goals. It’s important to assess the impact of any changed circumstances in your life and your priorities. As your life changes, some goals may become more important than others, or some may need to be eliminated. If something has changed in your life, make adjustments based on your current situation.

Reduce Your Debts

Your total level of debt should be declining each year. If it isn’t, you need to figure out where the cracks are and make a plan to fix them. Look at what you are spending in detail. If it’s too much, adjust your budget accordingly. Additionally, depending on the type of debt you have you might want to look into your refinancing options. Whenever possible, consider taking a frugal option to spending.

Look Over Your Retirement

Take a look at your retirement savings at the end of the year to make sure you are on track to receive the money you will need in your golden years. Are you making the maximum contribution to your 401(k) plan? Or, if you have maxed out, are you considering what your other options may be? Talk to a financial professional1 to get help if you need it.

Look Over Your Insurance Coverage

It’s important to review your insurance policies every year. Look over all of them and make sure the coverage you have is appropriate to your current financial circumstances. Your policies may no longer be adequate for your current financial level. When reviewing your policies, check to see if the insurance coverage you have is right for you. There are a few key moments, for instance, that should clue you in that your life insurance policy may need to change.

Most things you your life will require a little maintenance. From your home, your car, to even your personal health, it’s important to check in once and awhile. Forgetting or expecting thing to run the course with little effort could be problematic. Your finances are no different. Making sure you keep a keen eye on them can help you achieve your money goals.


1. The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.

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