Year End Financial Review in 5 Steps

I always get excited for the end-of-year round-ups.  Spotify Wrapped, all those “Top X of 2021” lists, all of it.  It’s fun for me to reminisce about the past year and remember things that happened and things that I enjoyed.  Just as important can be a look back at your financial life and health throughout the past year.  It can help you see patterns you may have otherwise missed and set you up for success in the coming year.  Here are some tips for performing a year-end financial review:

Did your income change this year?  Maybe you got a pay raise or took on an extra side gig.  Or maybe your pay has decreased.  Either way, it’s good to have a firm handle on what you have coming in each month/year.  If you’re not sure how much your income has changed and your primary income is through employment, just make an estimate.  You can verify it against your W-2 when it’s released in January.

Did you have any major expenses this year?  Maybe you made a big purchase or took a vacation.  You may also have had to shell out for vehicle repairs or medical expenses.  Knowing what periodic expenses you may have had in addition to your regular expenses can help you plan for next year.  If you have any major anticipated expenses for next year, consider those as you look ahead.

Take a look at your total debt owed: credit cards, loans (personal and student), car, mortgage.  Having a sense of your total debt load can help guide your financial decisions for the next year.  This is especially true if you’ve chosen to prioritize paying down your balances.

What good things have happened this year?  Have you decreased your total debt owed or increased your savings?  Maybe you’ve cut your spending in certain areas or gotten better at sticking to a budget.  If you have made any positive changes this year, be sure to give yourself a pat on the back!

What would you like to accomplish in this next year?  Remember to set SMART goals – Specific, Measurable, Attainable, Relevant, and Time-Bound.  Don’t just say “I want to save more money.”  Specifying how much and by when will make you much more likely to achieve that goal.

If you’d like expert help with a year end financial review and ongoing support from a certified financial coach, check out our Propel or financial coaching services to help you start your new year off right!