How to Do a (Painless) Annual Checkup on Your Finances

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Want to do a checkup on your finances, but don't know how to? Here are 7 steps to make sure your finances end the year on the right foot.

The end of the year is a perfect time to do an annual checkup on your finances. While you may still be finishing up holiday leftovers and recycling wrapping paper, it’s important to realize that an end-of-year financial checkup can be quick and painless if you keep it simple.

Annual checkups are all about maintaining and being accountable for the goals you set. You don’t have to come up with a whole new investment strategy if you don’t want to. Here are a few things you can do to make you annual financial checkup stress-free.

start with Where Things Went Wrong


If it’s not broke, no need to fix it. When you’re reviewing your finances, go back to the initial goals you set and focus on the ones you didn’t quite meet.

For example, if your goal was to try to save 15 percent of your income this year and you fell short, try to figure out why and what factors came into play.

Maybe you need to save more money each month in some areas or ask your employer to withhold more. Or, you might want to change that goal completely if your needs have changed.

Make adjustments that need to be made like setting up automatic transfers, calling your insurance company or anything else you can do to fix any of the issues you had this year so next year runs much smoother.

Make Small Adjustments to Your Budget


Your budget should change every year if not multiple times throughout the year as your situation changes. If you’ve never created a budget, now would be the perfect time to make a budget as we go into the new year.

You can sign up for Mint or Personal Capital for free to track your expenses over the last few weeks in just seconds so you can get a better idea of where your money is going.

If you already have a budget, it should only take a few minutes to determine which categories need to be updated. It took me only a few minutes to adjust my budget for the following year and I decided to change my monthly savings contribution, lower my auto insurance payment, and increase my monthly grocery budget by $100.

look at Your Retirement Accounts


Take a peek at your retirement account(s) to make sure you are on track to meet your goal, or if you need to rebalance. If you use a robo-advisor like Betterment, they already do this for free for you.

For your 401(k), the annual deadline to contribute up to the maximum is just about here but with your IRA, you can keep contributing until April 15.

If you’d like to step it up and start maxing out your 401(k) next year, check with your plan administrator to see if you can make a catch-up contribution. You won’t always be able to do this but it’s worth a try.

Check on Your Insurance


Have you gone through any major life changes like adding a child to your family or getting married? Check on your life insurance to make sure the coverage is sufficient for your family and update beneficiaries. If you need additional insurance, a term policy is a great option if you don’t already have one. It’s also a good idea to look into disability insurance.

While you’re thinking about insurance, make sure you’re not overpaying for your auto insurance. After a few minutes of research on my end followed by a five-minute conversation with my auto insurance provider, I was recently able to lower my auto insurance by $12 a month without making major changes to my deductible or collision and comprehensive coverage. It’s not a lot of money, but it does add up and can be better spent elsewhere.

See How Much Interest You’ve Been Paying on Your Debt


If you are currently paying off debt, it will be interesting to see how much it’s costing you each year so you can decide if and how you’d like to change your repayment strategy.

Most lenders will put together an annual statement showing you how much you’ve paid over the past 12 months. They’ll also show how much of your money went toward interest vs. the principal balance. You can check your account online to access this information as well.

If you have credit card debt you can accelerate debt repayment by lowering the interest rate you’re paying. Companies like Lighstream can help you consolidate your debt to obtain a lower interest rate. You can also look into balance transfer offers to cards with a 0% interest rate as an option to kill your debt faster.

My student loan lender recently sent me a similar document in the mail showing this information and it was eye-opening to see how much money I spent on interest throughout the year. Seeing information like this and checking in on my debt progress motivates me to push harder to reach my goals and minimize the amount I spend on interest each month.

No matter which strategy of debt repayment you choose, consistently making extra payments will save you money over time which is always a good thing.

Compare Salary Rates for Your Position


Now it’s time for the fun part. As you’re checking up on your finances, it’s always good to find ways to earn more money at your job. You can gain information about how much people are being paid for doing your exact job on sites like Glassdoor and PayScale.

The information you find along with a self-assessment of your performance over the past year may prompt you to negotiate a raise with your employer or increase your rates if you’re a contractor.

If and when you do receive a raise, focus on using the money wisely the following year and don’t give in to lifestyle inflation if it’s not necessary.

Want to do a checkup on your finances, but don't know how to? Here are 7 steps to make sure your finances end the year on the right foot.

Keeping It Simple


If you stick to your budget and maintain your finances throughout the year, your annual check up shouldn’t be too hectic.

Try to keep it simple and make a to-do list of tasks you’ve been putting off and focus primarily on your problem areas so you can improve your situation for next year.


Have you done your annual financial check up yet? What areas do you focus on most? How many times to you make adjustments to your budget throughout the year?

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Choncé is a freelance writer who’s obsessed with frugality and passionate about helping others increase their savings rate, eliminate debt, and work toward financial stability. She chronicles her journey with balancing motherhood, work, and finances on her blog, MyDebt


  • Kathy says:

    Each year we review the budget, adjust spending categories and review what we did the prior year. Generally we do it on the 1st of Jan., unless some really good football is on and then we do it on the 2nd. For example, this year we built a new home so all appliances and home repairs are under warranty, so we can divert some of the money we allocate for appliance and home repair to another category that perhaps fell short this year. At the same time, I clear out all the receipts, sort them and get them ready for tax filing.

    • Chonce says:

      Sounds like you have a great system in place. We’re not so good about going over everything exactly on the 1st but I try to get it done during the first week of January at the latest.

  • Syed says:

    A new year can mean a fresh start for your finances. Really like these steps as they can make a big impact on your finances for the rest of your life.

  • Buy, Hold Long says:

    I have a very similar system to this but it is a little different. I track my net worth every month on the first. It fluctuates quite a bit depending when bills are due and what I’m doing in that month. December is always the worst for me and to top it off Christmas is around there too so that just makes my budget blow out. Overall, I try to save as much as possible to counteract those spendings at the end of the year.

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