Don’t Forget: Your Annual Financial Check-Up Awaits

The start of a new year is the perfect time to pause, reflect, and set yourself up for a stronger financial future. Just like scheduling an annual physical for your body, a financial check-up helps you stay on track and become aware of potential issues early. Here’s how to create a comprehensive review process to set yourself up for success in 2025.

Key Steps for Your Annual Financial Check-Up

1. Review Your Budget and Spending Habits

Take a close look at your monthly budget and spending patterns. Are there areas where you consistently overspend? Could you redirect funds toward savings or investments? Tracking apps or tools can simplify this process and highlight trends you may have overlooked.

2. Evaluate Your Emergency Fund

Life is full of surprises, and an adequate emergency fund is your safety net. Aim to have at least 3–6 months’ worth of expenses saved in a liquid, accessible account. If you dipped into your fund last year, now is the time to rebuild it.

Once you’ve ensured your safety net is in place, turn your attention to refining your long-term objectives.

3. Update Your Financial Goals

Are your financial goals still aligned with your priorities? Whether it’s saving for retirement, paying off debt, or planning a big purchase, revisiting your objectives helps ensure your efforts remain focused. Break down your goals into actionable steps with clear timelines.

With clear goals in mind, it’s important to ensure your financial profile supports them, starting with your credit health.

4. Check Your Credit Health

Your credit report offers valuable insights, making it an essential part of your review. Access a free report from one of the three major credit bureaus (Equifax, TransUnion, Experian) via AnnualCreditReport.com. Stagger requests throughout the year to monitor your credit health consistently. For example: January – Equifax, May – TransUnion, September – Experian

As you assess your credit, don’t overlook another critical aspect of financial security: your insurance coverage.

5. Assess Insurance Coverage

From health and auto to homeowners and life insurance, your policies should reflect your current needs and future goals. Major life changes—such as a marriage, new home, or birth of a child—may require updates to ensure adequate coverage. Additionally, consider whether you need less common policies, like umbrella insurance for extra liability protection or long-term care insurance as part of retirement planning. Review your deductibles and coverage limits to ensure they align with your financial situation, and shop around periodically to compare rates without sacrificing quality. A quick annual review can help you avoid gaps and ensure you're not overpaying.

With your coverage in order, it’s time to focus on growing and safeguarding your wealth through your investments.

6. Evaluate Your Investments and Retirement Accounts

Review your portfolio and retirement accounts to help ensure they align with your risk tolerance and financial goals. Consider rebalancing if certain assets have drifted from their target allocations. Don’t forget to max out contributions to tax-advantaged accounts like 401(k)s or IRAs if possible.

7. Update Beneficiaries

Life events like marriage, divorce, or the birth of a child may require you to update the beneficiaries on your retirement accounts, insurance policies, and estate plans. This small step can prevent headaches for your loved ones down the road.

After ensuring your loved ones are protected, turn your attention to preparing for tax season.

8. Consider Tax Planning

Start preparing for tax season early by organizing your documents and reviewing potential deductions or credits. If your financial situation has changed, a consultation with a tax professional might uncover strategies to minimize your tax burden.

Conclusion

Taking the time to complete an annual financial check-up can give you clarity and control over your financial health, helping you make informed decisions and stay prepared for the year ahead. By setting aside just a few hours, you can identify opportunities for growth, address potential gaps, and build confidence in your financial future.

Don’t wait—schedule time on your calendar today to start your 2025 financial check-up. A little effort now can pave the way for a stronger and more secure year ahead.

- Article published on 1/10/25 -

Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 

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