Include These Items on Your Annual Financial Checklist

​It’s a new year again. For many, that means it’s once again time to assess life and identify areas for improvement. Of course, this period of reflection usually results in a list of resolutions or goals. Many people resolve to eat healthier or exercise more frequently. Others may focus on their education or career development. Some people may use this time to look at their house and plan out various home improvement projects for the coming year.
 
Financial goals are also a popular choice for New Year’s resolutions. The beginning of the year is the perfect time to analyze your financial situation and develop a list of action items. A regular annual financial checkup can help you stay on top of potential risks and on track to meet your biggest financial goals.

Ready for your annual financial review? Below are three items to include on your financial checklist. If you haven’t reviewed these items recently, now is the perfect time to do so.

Financial Inventory
A financial inventory is a document that contains every important component of your personal finances. It can provide a clearer view into your financial picture so you can set new goals and priorities. Your financial inventory may include a list of your assets, liabilities, income sources and much more.
 
Start by collecting statements and documents related to your savings, investments, property and other assets. Then collect documentation related to your debts, such as your mortgage, car loans, credit cards and others. By subtracting your debts from your assets, you can calculate your net worth.
 
You also may want to include other important items. Your credit score and full credit report contain important financial information. You may want to highlight those investments that are liquid, stable and easily accessible, as they may provide the most assistance in the event of an emergency.
 
Once you have completed your financial inventory document, you can use it as a reference point to quickly gauge your current financial standing. For example, your financial inventory may tell you that your debt is very high relative to your assets. Or you may learn that your credit card balances are higher than you thought. This can help you set goals for the coming year.

Budget
A budget can be a powerful financial tool. You can use it to gain greater understanding about your spending and to make important purchasing decisions. Unfortunately, nearly 60 percent of all Americans don’t use a budget.1
 
If you’ve never used a budget, now may be the time to start. There are plenty of apps, websites and software that can help you develop your budget. However, you could also use a spreadsheet or even a pen and paper.

Start with your monthly income. Then list your expenses and break them into categories. The categories should fall into two groups: fixed and discretionary. Fixed expenses are those that you have to pay every month, such as your mortgage or your utilities. Discretionary costs are those that are flexible, like dining out or shopping.
 
Compare your income with your total expenses. If your income exceeds your spending, you have money available to save. If your expenses are higher, you need to make changes to your lifestyle and your purchasing decisions. Visit your budget frequently to make sure you’re being disciplined and staying within your means.

Short- and Long-Term Goals
Finally, your annual financial checkup should include some form of goal-setting for the coming year and beyond. The new year is all about setting resolutions. Use your financial checkup as a springboard for action that can help you retake control of your financial future.
 
You could set a goal to pay off your high-interest debt by some point in the future. You could increase your retirement savings. Perhaps you could work to build a larger emergency fund. Set goals for the short and long term to improve your financial stability.

Ready for your annual financial review? Let’s talk about it. Contact us today at Gregory Financial Group. We can help you analyze your needs and goals, and then implement a plan. Let’s connect soon and start the conversation.

 
1http://money.cnn.com/2016/10/24/pf/financial-mistake-budget/index.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

17189 - 2017/12/12