With the new year just starting, now is a great time to sit down and review some critical items in your financial life. This will get you started off on the right path so that you can feel secure as make progress on your goals for this year. Let’s walk through the annual financial review together.

Setting the Scene

Before, we jump in, I want you first to imagine yourself 10 years from now. 

Are you still in the same house, town or state? Do you have kids or are the kids you have now off to college and you’re an empty nester? Are you still at your current job? Or even in the same field?

Better yet, are you debt free?

Take the time to dream and lay it all out there. There’s no time limit on this and no limit on your imagination. Now step back 10 years to where you are today. What do you need to do to get from here to your dream?

The next step is to break that dream down into actionable steps for this year, month, week and even today.  Let’s get you from here to there, starting with your money. 

You may think “What does my dream of being a full time writer living in the mountains have to do with my finances?” The answer? Everything. See, money is just a tool that you can use to build the life you truly want. So, take it and use it to build something great that not only works for you and your family, but helps you reach that dream.

Let’s get started!

Goal/Budget Oriented Items

Now that you have your long term goals, let’s set them aside to just focus on some of the financial mechanics. I promise, we will come back to them.


The first thing that I want you to do is check your current tax withholding using the IRS tax withholding estimator. Taxes eat up a large part of your paycheck and you want to make sure that you’re not giving the government a free loan until April 2021. You can use your first paycheck of the year and enter that data into the IRS’s tax withholding tool. Once you’ve gone through all of the questions, they will make a recommendation if any changes are needed on your end to meet your tax obligations. Update your tax withholding per these recommendations. I suggest doing this check halfway through the year as well to make sure that you’re still on track.

Your Budget

Next, I want you to go through all of your regular bills and see if you can get them lowered either be speaking with your current company or changing to another. Start with the following bills:

  • Home insurance
  • Car insurance- See if there’s a discount to bundle this with your home owner’s insurance.
  • Term Life insurance
  • Disability insurance– I suggest getting a company sponsored plan AND a privately held plan if you are financially able to do this.
  • Cell phone- We use Google FI and love it. Our average bill was $75/month for two adults.
  • Cable TV/Internet- If you have streaming services listed below, see if you can cut the cable cord!
  • Streaming services (Netflix, Hulu, Amazon Prime, HBO Go, etc.)
  • Any other subscriptions or regular bills you may have.

Now that you’ve lowered, or eliminated some of your bills, use these new numbers to create your budget based on when your paycheck will arrive. Plan to pay all of your bills from the 1st through the 15th with the paycheck you received on the 31st of the month before. This will help you keep ahead of the game!

As part of this budgeting exercise, set up automatic transfers to sinking fund accounts. These would accounts for items like car maintenance/ taxes/ registration, clothing, gifts, pet expenses, etc.

Retirement Savings

Set up, or increase, automatic transfers to retirement (401K/403B/457 plans), college (529 plan), investment and high yield savings accounts. Start with your employer sponsored retirement plans, if applicable to ensure that you’re receiving your full match. It’s free money, so you don’t want to miss out.

Now that your budget is all set, be sure to review it regularly. This will keep you aligned with your goals (i.e. debt payoff, saving down payment, etc.). We try to sit down and review our budget together every month.

Other Important Items to Review (at least) Yearly

On top of everything else in this annual financial review checklist, there are some key items that should be looked at (at a minimum) yearly. On the plus side, they can all be accomplished fairly quickly. I suggest just getting them all done in one day, but you can figure out what works best for you.

Your Credit

Did you know that you can access your annual credit report at FOR FREE? You can. Just head to annualcreditreport.com to get started. Check for fraudulent activity and FREEZE YOUR CREDIT REPORT for free. This is something that used to cost $10 every time, but with the Experian data breach, this service has been made free for everyone. It may be a pain to have to contact all three credit bureaus individually to do this, but with identity theft being more prominent than ever, you will be glad you did this. Besides, you can always unfreeze it later when you need to apply for a new credit card or loan.

Retirement and Estate Planning

Checking in with your Social Security benefits. If you’ve never done this before, go to ssa.gov and create an account. They will show you your recorded earnings for every year you’ve reported income, as well as, the benefits you could expect to receive in retirement. In helping with your next item (estate planning), they will also give you your disability benefit and your survivor benefit that your loved ones would receive upon your death.

When I say estate planning, most think that this is just for wealthy people in smoking jackets with pipes counting their stacks of money. False. Estate planning is for everyone. It controls what happens not only to your material possessions, but to YOU if you become incapable of taking care of yourself. The basic starter pack for this includes a will, living trust, healthcare directive and power of attorney. Cheap or free versions of these documents can be found at Nolo, LegalZoom, or eForms. These versions will only work if you have simple finances and requests. If your finances are complex, I highly recommend seeing an estate lawyer to ensure that these documents are comprehensive and correct. Review them all yearly and make updates as necessary.

In the same vein as the items above, go into each of your retirement accounts, bank accounts and insurance policies to double check that you have the correct beneficiaries named for each of these items.


Finally, if something happens to you, having all of the above documentation in place is a great start, but it may not help with the day to day that your family will face. Especially, if you were the one handling the majority of the finances. That’s where your “In Case of Emergency” documentation will pick up. This documentation will include everything from where all of these above documents are physically located to how your everyday bills are paid (including login info) to what is your child’s favorite recipe that could help comfort them in their time of need. I HIGHLY recommend the ICE Binder from Smart Money Mamas if you do not have this type of documentation already. Trust me, your loved ones will thank you.

Download Your Checklist Here!

A lot of information was just covered. Get your own download of this annual financial review checklist for FREE here!

Wrap It Up!

That’s it! I know that this was a lot of work, but break it up over the next week or two and complete one item each day. This will take some of the pressure off. Then you can relax knowing that you’re starting the year off on the right foot and get moving on your goals!

If you want financial guidance that it geared towards your personal situation, take a look at my financial coaching services page. You can work with me one-on-one and together, we will use your money to build the life you deserve!

Did you use this annual financial review checklist? Was it helpful to you? Let me know in the comments below!