Why you should review your finances every year
When life gets busy, it’s easy to put financial check-ups on the back burner. But just like you schedule annual doctor visits or car maintenance, your finances deserve the same attention. An annual financial review isn’t just a good habit—it’s essential for staying on track, adapting to changes, and making informed decisions that support your goals.
Life Changes, and So Should Your Finances
A lot can happen in a year: a job change, marriage, a new baby, moving to a new city, or even changes in tax laws or interest rates. Each of these can impact your financial picture in significant ways. Reviewing your finances annually allows you to reassess your goals and adjust your plan accordingly.
For example, if you’ve received a raise, you might want to increase your retirement contributions or start investing more. If you’ve had a child, your priorities might shift toward having more savings or getting additional life insurance. Without a regular review, things like this can be overlooked.
Track Progress Toward Your Goals
Whether your goals include buying a home, traveling, paying off debt, or retiring early, an annual review gives you a chance to measure your progress. Are you saving enough? Is your debt going down? Are your investments aligned with your risk tolerance and time horizon?
By comparing where you are now to where you were a year ago, you can celebrate wins and course-correct where needed. It helps keep your financial journey intentional instead of reactive.
Catch Problems Early
Neglecting your finances can let small issues snowball into bigger problems. Maybe you're unknowingly overspending in certain categories, or your credit score has dropped due to a missed payment. Maybe you’re paying for subscriptions you no longer use.
An annual review brings these issues to light. It’s a chance to look at your budget, check your credit report, review your investment performance, and make sure your insurance coverage is still appropriate. These check-ins can prevent costly surprises later on. By the way, it’s a good time to be sure your beneficiaries on your accounts are up to date and correct, as well. You don’t want that mistake.
Optimize for the Year Ahead
A review isn’t just about what went wrong or right—it’s also about planning for what’s next. Are there tax-saving opportunities you can take advantage of? Should you rebalance your investment portfolio? Can you bump up contributions to your HSA or IRA before the tax deadline?
Being proactive can save you money and help you take advantage of opportunities that align with your financial goals. You might even uncover ways to simplify your finances, celebrate good habits, and reduce financial stress.
Make It a Habit
The key is consistency. Put it on your calendar—maybe every January or at the end of each year. Whether you do it alone, with your partner, or with a financial professional, that one intentional review can lead to smarter decisions and more confidence in your financial future.
Your finances deserve your attention. A once-a-year review is a small investment of time that can pay off in a big way. Don’t leave your future to chance—plan for it instead.
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