Q: With 2020 drawing to a close, I’d love to give myself an end-of-year financial review before it goes. Where do I begin?
A: Giving yourself an end-of-year financial review is a wonderful way to check on the progress you’ve made toward your goals, highlight areas needing improvement and update your accounts, funds and investments. Here’s all you need to know about this important end-of-year ritual.
Take a few minutes to list all your debts and their interest rates. Have you made any real progress toward paying them off this year? Or have you stuck with minimal payments each month, leaving the actual balance to pile up since you’re mostly just paying for interest?
If your debt needs some help, you have two primary options for how to proceed:
For both methods, be sure to pay the minimum balance on all your other debts each month. Try to boost your income and/or trim your monthly spending for extra cash and use it toward the first debt you are paying off completely.
Review your savings from 2020. Have you reached your goals? Have you forgotten to put money into savings each month?
Going forward, make it easy by automating your savings. Set up an automatic monthly transfer from your checking account to your savings account in online banking or our mobile app. This way, you’ll never forget to put money into savings again.
Have you made measurable progress toward your financial goals in 2020? Take a few minutes to review your past goals, taking note of your progress and determining how you can move toward achieving them.
As you work through this crucial step, be sure to review the following variables:
The events of 2020 underscored the importance of making plans in case one becomes incapacitated for any reason. Create an In-Case-of-Emergency (ICE) Binder to hold all your important documents in one place in case the unthinkable happens. Because of the sensitive nature of the information it holds, be sure to keep this in a safe place where it will not fall into the hands of identity thieves.
Include the following in your binder:
As you finish reviewing your financial progress of the past year, look forward to accomplishing greater financial goals in the coming year. A great way to turn dreams into reality is to set goals that are SMART:
Specific
Measurable
Attainable
Realistic
Timely
Here are some goals you may want to set for the coming year:
Want some help with your end-of-year financial review? Set up an appointment with one of our Financial Educators.