How To Do an Annual Financial Checkup

When was the last time you had a physical checkup? Or when have you taken your car for its regular service checkup? So let us now look at your regular financial checkup. Have you ever had it at all?

Let us assume that you are on the road to begin a long trip. It is very possible that you should sometimes stop and check your roadmap to see whether you are on the right track towards your destination. Or if you do not trust your map completely, perhaps ask directions from one of the natives along the way for a more believable set of directions.

So also is an annual checkup of your finances. It is exactly serving the same purpose as your car checkup or medical checkup. The financial check or review is to show you how you have done in this area of your life over the past 12-month period. Then you can evaluate your own needs and plans to see whether your finances can still support them once you make the review.

Perhaps, one good period to go into this exercise is when you are approaching the last few months of the year. This is also the time to review some tax-saving techniques. However, if it is not feasible for you, you can opt to do it during the busy holidays or still right after the New Year has begun.

Now, you are ready to make the review of your money.

A good initial step is to analyze your goals. Ask yourself if you have done well this year about to end?  If the answer is no, then ask yourself where could you have made an error. Is it within your capacity to check how you failed? Did you change your objectives during the year? Once all these are checked, then you have to write your goals all over again to make your review more realistic.

An important factor is to appraise your own private and personal condition as of this date. Did you make any changes in your life or in previous years or are you planning to make any changes in the year about to end? For instance, did you undergo a change in a job?  Were you laid off and got another job?  How about divorce?  Was there an addition to your family like a new baby? Have you just retired from your job or bought another house?

Any of these kinds of changes can definitely change your income and your lifestyle dramatically. If any of the changes mentioned took place, then you might need to modify your overall budget and manner of spending to fit the new needs. Also, make sure you consider also your savings and your investments. Make time to allow for these important changes ahead of time in order that you can make a smooth transition.

An important next step is to analyze how your assets are protected. This will include your reviewing your house insurance, medical insurance and most important of all - your income earning ability by means of solid disability insurance. Financial checkups are always very relevant to ones life on earth.


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