Personal Finance

10 Items to Check Off Your Annual Financial Checklist

Financial Planning Checklist

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The thing about managing your personal finances is that you will rarely be able to mark something off your checklist and never look back. It will require your attention on an ongoing basis. Why? Because our lives change constantly. Our income, marital status, children, death, residency, employment, etc. will change consistently throughout our lives.

We also mature. Our interests, our needs, our goals evolve continually which requires us to reevaluate and revisit our financial circumstances and financial plans on an annual basis, at a minimum.

Despite how much income or what your net worth is, it is imperative that you take the time to intentionally engage in your financial life. You will only benefit by creating goals, assessing and reevaluating financial decisions and updating financial plans continually throughout your life.

So see below for 10 ways you can proactively engage in your financial life throughout the year. I have also created a free comprehensive annual checklist to provide you with the foundation on how to keep your finances top of mind over the course of a year – quarter by quarter.

10 Items to Check Off Your Financial Checklist on an Annual Basis

1. Revisit your contributions to your retirement and investment accounts

Retirement Accounts: If you contribute a percentage of your income to your employer provided retirement account or are contributing to an IRA, I want you to revisit what you are contributing on an annual basis and ask yourself some thought provoking questions like: Do I have room to contribute more? If I receive a bonus this year, what percentage will go to my retirement account? What would my paycheck look like if I chose to contribute 1, 2 or 3% more? 

Taxable Investment Accounts: If you max out your retirement accounts and/or are contributing to a taxable investment account, each year revisit how much you are actively investing on a monthly basis. Try to commit to a number that is both feasible and manageable for you to sustain throughout the year and then increase it on an annual basis. 

Start engaging and flirting more with the idea of paying yourself first!

2. Look into your withholding

Every January I want you to revisit your withholding from your paycheck. If you had a change in circumstances or will be in the upcoming year, then it may be time to reevaluate your withholding. A change in circumstances would include; getting married, divorced, having children, switching jobs, etc. these are all changes that would have an impact on your taxes. Read my blog post to learn more and identify if it makes sense for you to withhold more or less depending on your circumstances and your personal preferences. 

3. Review your wishes for your assets if God forbid something were to happen to you

Update beneficiaries, a will, a trust, medical and financial power of attorney and ensure that you have documented or communicated your wishes for your assets.

Many of us don’t plan for things like this because we either don’t believe it could happen to us or simply don’t want to entertain the idea of it happening to us. But what sounds like a very close second in terms of sadness for me, is the idea that not only have I lost my life or have become incapacitated, but that everything that I worked so hard for went to someone or something I didn’t intend it to. That is a very hard pill to swallow and can be avoided if you document your wishes – no matter how much or how little of assets you may have. 

4. Create 3 short term financial goals for the next 12 months

Documenting your short term goals provides a sense of accountability for the things you are trying to achieve. Financial goals don’t always have to be associated with investing more or paying off more debt (although those are great goals too). They can be tied to experiences, family vacations, or spending challenges. For example; I’d like to save $3,000 to go on an all-inclusive trip with my significant other. I’d like to save $1,000 for Christmas next year. I commit to limiting myself to $100 per Target visit (a girl can dream)…

Whatever it is, be proactive in identifying what you want. Be intentional, specific and create a game plan for how you will achieve it.

5. Review all utilities and bills for reasonableness

We are in the subscription generation. Netflix, Apple, Hulu, Amazon, etc. Although many of these subscriptions are insignificant in value by themselves, they all add up to very significant amounts on a monthly basis.

Revisit your subscriptions, your bills and utilities and identify if they are needed, reasonable in price or is it time to shop around or cancel? Little amounts add up over time and it’s important to review their impact on an annual basis.

6. Create a system for yourself that will allow you to build awareness around your spending and create a sustainable budget

Some people will require the type of discipline to track every expense and others simply will need to look at their credit card activity every few days to get an understanding of how they are spending. There is not a one size fits all or universal approach that will work for everyone. But you do need to create awareness around where your money is going in order to build a reasonable budget that will provide you the opportunity to spend intentionally today and save thoughtfully for tomorrow.

If you are not sure where to start – check out the FinPowered Wealth Tracker that is a 4 in 1 template to help you understand and manage your net worth, your spending, financial goals and your budget.

7. Review investment strategy and allocation to make sure it still aligns with your risk tolerance and long term goals

Put eyes on your investment account. Despite your level of expertise in this area, take a look at what you are invested in. Do a little research, try to understand it’s strategy and purpose. If you are unclear, uncomfortable or unsure about how you are invested and if it makes sense for you, I encourage you to schedule a call with your financial advisor, with myself or another financial professional to walk you through your investment allocation or to create an investment allocation that would be appropriate for you.

8. Assess Debt

Create a list of your outstanding debt, the balances, the terms of the loan and their corresponding interest rates. Assess if it makes sense to consolidate debt, refinance debt or accelerate a specific loan payoff due to high interest rates.

Debt has a slow creep effect into the lives of many. It slowly will wreak havoc on your finances and your lifestyle and it is imperative that you have a game plan on paying it down. Debt can be an incredible tool to build wealth, but debt used irresponsibly or loosely can ruin financial lives.

9. Consolidate & Simplify

Simplicity in finances is probably the biggest and best “secret” to financial success. Keep it simple. As an individual, you do not need 10 accounts, 8 credit cards and 5 different banking relationships. That’s enough to make anyone overwhelmed and run in the opposite direction.

What you need is a system that works for you and I can tell you first hand from working with hundreds of clients – the more excess you have in your financial life, the more it will get out of hand and the less likely you are to manage it well, if at all.

Keep your financial life simple. Consolidate your IRAs, old 401Ks into IRAs, consolidate checking accounts, identify the credit cards that make the most sense for you and/or offer the most perks and commit to a financial institution or two because the more you have with them the better offerings and pricing you will receive.

10. Check in with a professional

Call on a financial advisor, a CPA or an experienced professional to assist you and provide you with perspective, options or simply a level of expertise in a field where they have seen hundreds of scenarios play out differently for each individual or family. Find someone you like and someone you trust will guide you towards the right financial path.

Let’s be honest here, our lives get BUSY. Some of us just simply don’t have time or don’t want to spend time on organizing our financial lives or executing on certain things, so it may require us to invest our time and money into a professional relationship that will assist us in our financial journey. The good ones will be worth it.

Hope you found this helpful and don’t forget to go to the following link to review my free comprehensive annual financial planning checklist.

Tune in every Tuesday and Thursday for blog posts!

Follow @finpoweredfemale for more personal finance, tax, investing and business ownership tips on building wealth with confidence.

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