February 12

Annual Financial Checkup


Adding an annual financial checkup to your money management habits will help you prepare for upcoming events.

You may visit your doctor once a year to make sure all is well, but there is something else to pencil in on the calendar: an annual financial checkup.

If you were building a house, you would stop occasionally and look at the blueprint to see if you were on the right track. An annual financial checkup serves the same purpose. Most experts suggest conducting a regular personal financial checkup yearly or after a significant life event (such as marriage or divorce). It is essential to follow a system when reviewing your finances to ensure you don’t leave anything out or miss something critical to your financial well-being.

One needs to look no further than their money management habits and how they affect how secure they feel in making financial decisions under adverse circumstances.

Here are the main topics you should cover when conducting an annual financial checkup.

  • Life Changes - Have you changed jobs, gotten married, divorced, a new family member, bought a house, moved, or retired?
  • Financial Goals - Any changes in your financial targets, i.e. emergency fund, saving for a down payment on a house or car, or anything that requires money you don’t already have.
  • Budget - changes in your blueprint for how you handle income and expenses repeatedly may need adjusting monthly.
  • Debt - Review your progress in paying down all debt, including loans and credit cards.
  • Credit Report and Score - Check for errors and report any you find immediately.
  • Retirement Saving - As part of your financial checkup, evaluate your contributions to your 401(k), 403(b), or any retirement saving vehicle.
  • Taxes - The IRS suggests that taxpayers conduct a Paycheck Checkup using a withholding calculator and make changes to withholding if necessary.
  • Insurance - Your needs change over time- Make sure you have an appropriate amount of life, disability, and homeowners, including flood.
  • Estate Plan - Evaluate (or create) your estate plan. Review your will or trust to make sure you are happy with your choice of executor.

The Bottom Line - When you are finished with your financial checkup, you may want to consult one or more experts. Consulting a trusted financial advisor or other specialists (estate planner, insurance agent, tax advisor) to make sure you haven’t left out anything important. Make a written note of all changes you have decided to make as a result of your checkup and put in place a plan to make those changes as soon as possible. Then, relax until it is time to do it all again next year.


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