Good financial management will help you save time, money, and stress by prioritising expenditures. It can be helpful to make informed decisions and allocate resources effectively. At least some of the following money checks might be useful for you:
01 Review your 2023 financial Goals
Did you meet your aspirations? Why or why not? Checking in on the progress of your goals can help you identify specific areas to work towards in 2024. It will also help you decide how to prioritise spending and saving. The goal review is inevitable to determine if adjustments are needed.
02 Donate to Charities
The end of the year also means reviewing charitable contributions. What have you already contributed, and what else can be looked at? There are many ways to donate—money, used clothing or household items in good condition, or even gifting through stocks or trusts. Charitable contributions are great for one’s community, making the world a better place.
03 Review your Insurance Policies
Does your current coverage still meet your needs? Look at the premiums, deductibles, and coverage limits on your life insurance, car insurance, and homeowners insurance policies. Consider shopping around for better rates, bundling policies, or increasing deductibles to help you save money on premiums.
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04 Check your Liquid Savings
Everyone should have at least six months’ income saved in a liquid account for easy access in an emergency. Perform an annual assessment of your finances and determine if you have the needed funds and/or a plan to build your savings up to your desired balance.
05 Check your Investment Accounts
Review your gains and losses for the year as well as your current asset allocations. Consider whether it makes financial sense to make any changes or rebalance your portfolio. A diversified portfolio is made up of different types of investments with varying patterns of risk and return, like stocks, bonds, and short-term investments. If one part of your investment mix is declining, another part may be doing well, or at least not going down as much.
06 Review your Credit Report
According to Consumer Reports, a US nonprofit consumer organisation dedicated to independent product testing, about one-third (34%) of consumer credit reports contain errors. The best way to find those errors and fix them, thereby improving your credit score, is to review your credit report. Look for credit products or applications that you did not initiate. It’s important to review the information contained in your credit report and verify that it’s accurate. While an incorrect balance or missed payment can negatively affect your score, an unknown credit inquiry or open account could be the first sign of identity theft.
07 Consider any Life Changes.
If you’ve experienced major life events, like a new baby, a new job, marriage, divorce, a child starting college, or even a move, consider how those events might impact your health insurance, tax planning, estate planning, and income withholdings and deductions. And, of course, look into allowable contributions to retirement plans. Saving early and often is critical to achieving long-term retirement goals. Remember to “max out” your allowable contributions to all retirement accounts, taking advantage of the “catch-up” contribution if you are over 50 years old.
08 Review and adjust your Budget
The essential question you can ask yourself is: Did I spend more money than I made this year? Examine your spending during the past year in categories like housing, transportation, food, and utilities. Every consumer should check where he or she spent his or her money during the year—was there a savings goal, and was it met? Understanding the inflow and outflow of cash will help you review lessons learned. Check your progress on reducing debt, saving for emergencies, and other goals. Do you anticipate any major expenses next year, like replacing your furnace, a landscaping project, or a new car? This is also a good time to review your financial history and ensure that it’s accurate.
09 Update your Beneficiaries
Check your beneficiaries on investments, bank accounts, and other assets. New regulations might have changed the rules for inheriting assets, and proper planning on that front should be continually updated. Also, if you don’t already have powers of attorney in place, be sure to address that, too. This will help ensure your finances are protected in case of an emergency.
10 Set specific and measurable Goals for next Year
Instead of saying, “I will save more money next year,” try this: “I will commit to transferring USD 400 per month into a high-yield savings account dedicated to my down payment for a new house.” Or commit to paying down a specific credit card debt by a specific amount within six months. Make a list of your goals and check your progress each quarter. Financial goals that are actionable, specific, and measurable are more likely to provide motivation and boost the odds that you’ll meet them.
