5 Financial Reviews for Year’s End

by Miranda Marquit · 4 comments

taking notes
I don’t know about you, but December crept up on me. How is it the end of the year already?

As I consider what’s next and get ready for the coming year, I’m aware that there are a few things I haven’t taken care of with my finances. In fact, I’ve been borderline neglectful of my finances because of the crazy nature of the last six months.

Take the time to review different aspects of your finances before the end of the year arrives. Here are five financial reviews for the end of the year:

1. Your Spending

What have you been spending money on? Does it match your priorities? Did you overspend more than you should have? Are most of your purchases planned, or do you make a lot of impulse purchases?

If you want to get your finances under control, it’s essential to know where your money is going. Personal finance software is a great way to keep track. All you have to do is run a report to see which categories get the most attention from your pocketbook.

2. Your Saving

Do you save enough money? Review your savings habits. Do you put money toward retirement and have an investment portfolio? Do you have an emergency fund? Do you save up for large purchases?

Consider your long-term and short-term savings goals. Make sure you are on track with them. In some cases, it can make sense to cut back on the extra spending in order to divert some of that money toward your savings.

This is also a good place to review your debt load. Pay down your debt as quickly as possible to reduce the amount of interest you pay others.

3. Your Giving

One of the best ways to ensure a well-rounded financial life is to give to others. It seems counter intuitive, but it actually works. Look at how you use your resources to help others. Research charities to make sure your money is going where it should. I love donating to local food banks and other local organizations because I can see how the money is used in the community — and even sit on the board of directors and make sure the money is doing what it should be.

4. Your Taxes

Let’s not forget about a review of your tax situation. What deductions and credits are you eligible for? Review your spending and see if you can reduce your tax liability with a couple of well-placed contributions.

Don’t forget to review your pay stub as well. Are you withholding too much from your paycheck? A big tax return is an indication that you are withholding too much and giving the government an interest-free loan. Consider adjusting your withholding to improve your monthly cash flow — and put that money to better use.

5. Your Asset Protection

Are you covered in case of an emergency? Asset protection is a big part of your finances so make sure you are covered. You need to check your health care coverage (it’s open enrollment time), as well as your auto and home coverage. Tweak your coverage if necessary to balance cash flow with protection. You don’t want to get blind sighted by an accident but you also don’t want to overpay above what’s necessary.

Once you finish the financial review, you will have a better idea of what you did well this year, and how you can improve next year. It’s a good way to get back on the right track financially.

Have you done a financial review yet this year? If not, then start soon before the year slips away.

Editor's Note: I've begun tracking my assets through Personal Capital. I'm only using the free service so far and I no longer have to log into all the different accounts just to pull the numbers. And with a single screen showing all my assets, it's much easier to figure out when I need to rebalance or where I stand on the path to financial independence.

They developed this pretty nifty 401K Fee Analyzer that will show you whether you are paying too much in fees, as well as an Investment Checkup tool to help determine whether your asset allocation fits your risk profile. The platform literally takes a few minutes to sign up and it's free to use by following this link here. For those trying to build wealth, Personal Capital is worth a look.

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  • webbrowan says:

    You shouldn’t just be looking at your finances at the end of the year. It’s a good milestone to take, but you should try to look at your accounts on a more frequent basis to understand your habits better.

  • Jeff | VTX Capital says:

    These are some great points to start with. I just read about conducting a year-end review, so these financial-related aspects will certainly be helpful and hopefully not too eye opening!

  • Gary @ Super Saving Tips says:

    Those are all important aspects to review, especially the often overlooked asset protection one. Healthcare coverage is a given, but long term disability insurance is one too many people miss. Make sure if illness or injury keeps you from working, your income is protected!

  • Jonathan Dyer says:

    You’ve pretty much described my annual review to a T. As you mention this is a great time to see if you have more to set aside for retirement, especially since you have until April to make it count toward your 2016 limit. Great piece!

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