It’s almost 2024 and as the new year approaches, now is an excellent time to do a financial checkup! Performing a financial checkup at the end of the year is a great way to assess your financial health, set goals, and plan for the future. At MMCCU, members have access to convenient financial checkup tools through online banking.
The new cutting-edge tool included in online banking is designed to elevate your overall financial health by providing a thorough overview of spending patterns and cash flow. It enables you to analyze budgets, assess debt-to-income ratios, and undergo a comprehensive financial examination. Additionally, you can expect to receive personalized tips and recommended actions to cultivate a more robust financial outlook. It’s free to members! Learn how to sign up here.
Here’s a step-by-step guide to help you conduct a comprehensive financial checkup:
- Review Your Financial Goals:
- Reflect on the goals you set at the beginning of the year. Did you achieve them? If not, what obstacles did you face?
- Consider your short-term and long-term financial goals. Are they still relevant? Do you need to adjust them?
- Assess Your Budget:
- Examine your monthly budget. Compare your actual spending to your budgeted amounts.
- Identify areas where you overspent or underspent. Adjust your budget for the upcoming year accordingly.
- Check Your Emergency Fund:
- Evaluate the status of your emergency fund. Financial experts generally recommend having three to six months’ worth of living expenses saved.
- If your emergency fund is lacking, make a plan to increase it in the coming year.
- Review Debt and Credit:
- Check your outstanding debts, including credit cards, loans, and mortgages. Evaluate your progress in reducing debt.
- Review your credit report for accuracy. Address any discrepancies and consider strategies to improve your credit score.
- Assess Investments:
- Review the performance of your investment portfolio. Consider whether it aligns with your risk tolerance and financial goals.
- Rebalance your portfolio if necessary. Consult with a financial advisor if you need guidance on your investments.
- Evaluate Insurance Coverage:
- Review your insurance policies, including health, life, auto, and home insurance. Ensure coverage is adequate for your current situation.
- Update beneficiaries and consider making changes if your circumstances have evolved.
- Retirement Planning:
- Review your retirement accounts (e.g., 401(k), IRA) and assess their performance.
- Check if you’re maximizing contributions to retirement accounts. Consider increasing contributions if possible.
- Tax Planning:
- Assess your tax situation. Consider making tax-deductible contributions to retirement accounts or other tax-efficient investments.
- Gather necessary documents for tax filing, such as receipts, investment statements, and W-2 forms.
- Update Your Net Worth:
- Calculate your net worth by subtracting your liabilities from your assets. Track changes over time.
- A positive trend in net worth indicates financial progress.
- Set Financial Goals for the Next Year:
- Based on your assessment, set realistic and achievable financial goals for the upcoming year.
- Break down larger goals into smaller, actionable steps.
- Seek Professional Advice:
- If needed, consult with a financial advisor or tax professional. They can provide personalized guidance based on your financial situation.
- MMCCU can recommend professionals that can help!
Remember that a financial checkup is not a one-time event; it’s an ongoing process. Regularly reassessing your finances helps you stay on track and make informed decisions for a secure financial future. Contact our team to learn more!
