You Should Do This Annual Financial Checkup

annual financial checkup

You probably visit the doctor once a year for your annual physical exam. You probably also take your car to the shop every 5,000 kilometers. Why not do an annual financial checkup too?

The end of the year is the best time to do this, because a new year = fresh start. By taking half an hour or so to sit down and check that your finances are doing great, you can make sure that you’re putting your best foot forward financially as you enter 2015.

To get you started, we’ve drawn up a quick outline on the things you need to address during your annual financial checkup.

Measure your progress towards your goals.

As we said in our article about how to achieve your financial goals, setting a goal is the first step to financial security. The perfect time to check on how you’re progressing with your goals is right before the holiday madness. Are you on track to save up for that new car? Are you meeting your retirement savings goals for the year? If not, what steps can you take in the coming year that will fix it? No matter what your goal is, make sure you include it in your annual financial checkup.

Study your budget and expenses.

If you’ve been keeping a budget, check where your money went over the last year. This way, you can create a better budget for next year, and control the expenses that may be causing the overspending. Knowing where your money is going is an important building block of financial security. If you don’t know where it’s going, you’re not going to be able to control it.

Take big life changes into account.

Big life changes will have an equally big impact on your finances. If you’re planning on getting married or having kids, you’ll have to change your budget and reevaluate your investments. Other big life changes that can affect your finances include changing jobs, moving house, or getting a mortgage. Include these and similar factors when reviewing your finances and creating your budget.

Evaluate your debt situation.

How are you doing with your repayments? Hopefully, your debt ratio is steadily going down. If not, go back to your budget and see how you can increase your debt payments to pay them down faster. Or try one of these strategies to defeat credit card debt. Increasing debt can be all right in some cases, like if you’re pursuing education or starting a business, but if your debt is going up because of needless spending, cut back.

Check your investments.

You should already be evaluating the performance of your investments regularly (every three to six months), but at the end of the year, perform a general check just to make sure your portfolio is healthy and growing. Evaluate how your investments are doing and that they’re performing according to your financial plan. If some aren’t doing well, it might be time to sell. The end of the year is also a good time to look at different options for the new year, if you decide that you want to diversify, alter the risk profile of your portfolio, or change your investment strategy.

Plan for end of year bonuses.

If you don’t make plans for what to do with your 13th month pay, or whatever bonuses you get at the end of the year, it will disappear faster than you can say “Christmas sale — 50% off!”. Think about how you’re going to use that money — add it to savings? Pay back a loan early? Invest it in UITFs? Use it for a big holiday blowout? Whatever you decide, make sure you plan for it so your money goes where you want it to. Here are some ideas for what you can do with an extra P20,000.

Plan for next year.

Now that you know how you’ve done financially in 2014, it’s time to plan for 2015. Determine your goals for the year. Look at your budget to see how you can achieve them. Write down the big expenses facing you in 2015, and create an action plan so that you can deal with them easily. Preparing for the next year will help ensure your financial well-being even before 2015 has started.


Now you have a great picture of how 2014 was for you, financially. If there are problem areas, now you know which ones to address. But if your annual financial checkup revealed no anomalies, then congratulations! You’re well on your way to a financially healthy 2015.


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