Annual Financial Check Up
Each new year, we set new goals, create plans for the year, and map out our planned vacations. This is a great time to also review your finances and ensure you're on the right path for your financial future. Below is a list of a few things that you should do at least annually, and you might as well do it in January when you are organizing your plans for the year.
- Update Your Net Worth
Your net worth is a summary of what you own, minus what you owe. Your goal should be to increase this number each year. You can increase this amount by accumulating assets (ie your salary, or investment growth). You can also increase your net worth as you pay down debts like your mortgage or student loan.
- Negotiate Your Automatic Bills (Cellphone, credit card)
Do you have bills you’ve been paying but haven’t looked at in a few years? Maybe you haven’t changed your internet or cell phone plan in a while. Give those companies a call and see if they have deals or you can find a better plan. Other things to try and negotiate: Insurance premiums, bank fees, credit card interest rates.
- Increase Your Monthly Investments By A Manageable Amount
Have you heard of inflation? Each year things cost more (or your money buys less). With prices of products increasing annually, you’ll want to make sure your savings keep up! Try to increase your investments each year by a manageable amount. This could be anywhere from $5/month to $100/month depending on your financial situation. You’ll be blown away by how much you’ve saved in a few years if you do this every year.
- Set Financial Goals for the Year
2020 was a weird year and impacted everyone differently. Many of us had financial goals that were impacted by COVID-19 (hello, no vacation!). We had tickets booked for travel in August 2020 but received vouchers when our flights were cancelled. This means in 2021 (if we are allowed to travel) we won’t have to pay for our flights, allowing us to allocate those dollars elsewhere. Common financial goals include: paying off debt, saving a down payment, and saving for retirement.