End-of-Year Financial Checkup: 8 Steps to Start the New Year Strong

As the holidays bring the year to a close, it’s not just a time to reflect on family milestones and accomplishments—it’s also the perfect opportunity to evaluate your financial health. A year-end financial checkup can help you see where you stand and set the stage for a brighter, more secure year ahead. Ready to take control? Here’s an eight-step checklist to guide you through the process.  

Step 1: Evaluate Your Spending

You need a realistic understanding of where you spend your money. Start by reviewing your checking account and credit card history for the last several months. Be sure to include irregular expenses such as insurance payments and medical bills, and any receipts you may have saved.

For an even clearer picture, consider using a spending tracker. Many financial institutions offer tools within their online platforms to help you categorize expenses and identify where you can trim.

Step 2: Check Your Savings Goals

Are you saving enough? Whether it’s for an emergency fund or future dreams, now is a great time to check your progress. If your savings aren’t where they should be, identify areas where you can cut back and start putting money aside. 

Remember: saving isn’t just about dollars – it’s about having peace of mind. Building a solid emergency fund can reduce stress and help you tackle the unexpected challenges with confidence. 
 

Step 3: Ask About Employer Benefits

Whether you are a full or part-time employee, most employers have various benefits they offer. A 401(k) tax-advantaged savings plan is usually offered to full-time employees. If you are eligible to participate, be sure you’re contributing enough to maximize the match – it’s essentially free money. Don’t stop there; your employer may offer stock options, college tuition reimbursement, discounts, and insurance benefits. There may also be free financial counseling or budgeting advice. 

Step 4: Check Insurance Coverage

Insurance is a critical part of your financial planning checklist. There are various types of insurance coverage that are important for you and your family. Whether it’s short or long-term care for loved ones, including older family members, it helps protect you from increasing medical costs, and offers financial protection. If an unexpected life event happens, you should have a life insurance policy which includes accidental death, critical illness or disability benefits to make sure your family will be taken care of financially. 

Step 5: Meet with a Financial Professional

When you look back at the last 12 months of spending, it can be challenging to gather the key details of your financial life. A financial professional can help you turn a daunting financial review into a clear, actionable plan. Bring your spending history, savings goals, and investment details to the table for a comprehensive assessment. 

A financial professional can also help you assess your progress on the path to retirement planning. A best practice is to do this on an annual basis to determine whether or not you are contributing the maximum benefit allowed to either traditional or Roth IRA or other type of savings plan. You can also prioritize your goals for spending and saving on your journey to a more confident financial life.
 

Step 6: Assess Your Financial Portfolio

If you have a financial portfolio, you should understand how your money performed since the last review period. By doing so, you can see how the results responded to market conditions, if they are aligning with your goals, and if the risk tolerance meets your comfort level. Adjustments to your investment portfolio can be made to match with your desired asset allocation. Most financial professionals recommend evaluating a portfolio every six to 12 months.
 

Step 7: Set Financial Reminders

Consistency is key to financial health, and a simple calendar reminder can help you stay accountable. Plan to review your account regularly by adding a monthly, bi-monthly or every six months review tickler to your calendar. Whether it’s quiet time alone to review results and adjust or working with a financial professional, it will be time well spent to keeping yourself on track. 

It’s helpful to conduct an annual assessment of your credit report and score, insurance coverage, investments, and retirement accounts.   

Step 8: Keep Learning

Financial literacy is an ongoing journey. Find a book, blog or podcast to learn more about topics like budgeting, investing, and credit management. Check your credit report on an annual basis to review your debt, make sure information is accurately reported regarding your financial activities, or resolve any issues. A free report is available from each of the major credit bureaus (Equifax, Experian and TransUnion) per year or visit the Consumer Financial Protection Bureau. 

Start the Year Strong

Your finances deserve as much attention as any other part of your life. By taking these eight steps, you’ll be setting yourself up for a more secure, confident, and successful new year.