How To Do a Year-End Financial Review: Setting the Stage for Financial Success

Updated: December 28, 2023

As the year comes to a close, taking stock of your financial situation through a comprehensive year-end review is a prudent step toward achieving your monetary goals.

This annual assessment not only provides insights into your financial health but also serves as a foundation for strategic planning in the upcoming year.

Here’s a quick guide to conducting a thorough year-end financial review.

1. Assessing Income and Expenses

  • Review your income sources, including salary, bonuses, and additional income.
  • Scrutinize your expenditures, categorizing them into essential and discretionary spending.
  • Identify areas where you can cut costs or redirect funds towards savings and investments.

2. Budget Analysis

  • Evaluate your current budget against your initial financial plan for the year.
  • Analyze budget variances and identify any consistent overspending or underspending.
  • Make adjustments to your budget based on changing circumstances or financial goals.

3. Debt Review and Reduction

  • Summarize your outstanding debts, including credit cards, loans, and mortgages.
  • Prioritize high-interest debts for repayment and consider debt consolidation options.
  • Set realistic goals for reducing overall debt in the coming year.

4. Emergency Fund Evaluation

  • Assess the status of your emergency fund.
  • Ensure the fund is sufficient for at least six months of living expenses.
  • Adjust contributions to the emergency fund based on changes in income or expenses.

5. Investment Portfolio Analysis

  • Review the performance of your investment portfolio, considering both gains and losses.
  • Evaluate the asset allocation to ensure it aligns with your risk tolerance and financial goals.
  • Consider rebalancing the portfolio, if needed, based on market conditions and personal objectives.

6. Insurance Coverage Review

  • Review your insurance policies, including health, life, auto, and property insurance.
  • Ensure that coverage is adequate for your current circumstances and make adjustments as necessary.
  • Explore opportunities for bundling insurance policies for potential cost savings.

7. Retirement Savings Check-Up

  • Assess your contributions to retirement accounts, such as in P.E.R.A. or your company’s offered programs.
  • Consider increasing contributions if possible, especially if you haven’t maximized tax-advantaged limits.
  • Review your retirement goals and adjust your savings strategy accordingly.

8. Setting Financial Goals for the New Year

  • Reflect on the financial goals set at the beginning of the year.
  • Celebrate achievements and reassess goals that may need modification.
  • Establish clear, measurable financial objectives for the upcoming year.

9. Consulting with Financial Professionals

  • Consider seeking guidance from financial advisors, accountants, or other professionals.
  • Discuss any major life changes, financial concerns, or investment strategies with experts to make informed decisions.

In Summary

A year-end financial review is a valuable tool for maintaining financial stability and planning for the future.

By dedicating time to assess income, expenses, investments, and goals, you empower yourself to make informed decisions that align with your financial objectives.

Remember, financial success is an ongoing process, and a thoughtful year-end review sets the stage for a prosperous financial journey in the coming year.

What to do next: Click here to start your financial journey with IMG Wealth Academy

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