Take The 8 Step New Year Financial Checkup (2019 Edition) (2024)

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Every year, you make time to head in for a visit to your doctor, dentist, and maybe even your optometrist. Why? A checkup is one of the best ways to make sure you are in good health. The simple truth is you should also make time for a quick financial checkup before or after the new year.

It’s possible you set some financial goals last year – maybe you made it your mission to pay off your student loan debt once and for all or save up for a home down payment – but haven’t bothered to evaluate your progress.

Maybe you just need a clean slate but aren’t sure where to start.

No matter what situation you may find yourself in today, a financial checkup is exactly what you need to get off to a great start and actually form a better plan for your money.

That’s why I created The 8 Step New Year Financial Checkup. It is designed to help you look back on the past year AND make 2019 the year that you eclipse all your previous money wins.

If you’re ready to dive in – no gloves or shots necessary – let’s review the past year and complete your annual financial checkup.

1. Do You Have a Budget (One That Actually Works)?

The dreaded “B” word is pretty polarizing in the world of personal finance.

Love it or hate it, you need a plan for your money.

And that’s exactly what a budget gives you – a plan to put you in charge of where your money is spent.

If you’ve never made a budget (or had one that really works), don’t worry. It’s not nearly as complicated as it sounds.

Sign-up for our brand new FREE email course, The 3 Day Budget Breakthrough, and we’ll help you set-up a budget that will actually work for you.

Already have a budget? The course will definitely help you, too – or you can check out this article if you’re in a hurry.

2. What Are Your Current Debts and Credit Scores?

When going through your financial checkup, you need to skip all sugarcoating and be straight with yourself. Tackling the not-so-pretty parts of your financial life head on will help you do what ignoring them can’t do: make meaningful changes.

For most people, the dark side of personal finance revolves around debt and credit scores. And it makes complete sense.

Borrowing money isn’t always bad, but once you get in over your head and start struggling to make your minimum payments, it doesn’t take long for good credit to take a nosedive.

That’s why a key component of your financial checkup lies in recognizing your current debts and credit scores. Knowing is half the battle – and one of the keys to getting out of debt is recognizing what you owe in the first place!

Good news: You can check out both with Credit Sesame. It takes less than 90 seconds to sign-up, and you’ll get FREE access to a look at your credit scores and current debts.

No, it won’t damage your credit one bit, and no, they won’t ask you for your credit card number.

Sign-up for Credit Sesame for FREE here.

3. How Much Money Are You Wasting?

One of the easiest changes you can make as a result of this financial checkup is eliminating a few money wasting habits.

No, I’m not talking about the unavoidable things that pop up that just feel like a waste of money (car repairs, dentist bills, and home repairs come to mind). I mean the things you can ACTUALLY control.

If you have unused services or subscriptions you want to cancel but don’t have the time (there’s a FREE appfor that, by the way), routinely pay full price for everything, or haven’t mastered the art of saying “no,” these are low laying fruits that you can reach for right away.

And once you replace wasteful spending habits with an automatic savings approach, you’ll notice a big difference.

4. Do You Have Financial Priorities and an Action Plan? (Your Financial Checkup Depends on This!)

Establishing financial priorities and making a plan to act on them requires discipline and honesty.

Nope – a new pair of Jimmy Choos and Taylor Swift tickets aren’t really financial priorities. But you knew that, you grown up, you!

If you want this year to be different, you need a game plan. And no matter where you currently fall on the financial planning spectrum, you need to create a plan that aligns with what matters most to you.

5. Are You Prepared for Unexpected Financial Emergencies?

Did you know the average family is unable to pay for unexpected expenses of over $500?

Financial emergencies are an unavoidable fact of life, and most financial experts recommend maintaining an emergency fund of at least $1,000. If you’re a low income earner you may be able to get by with a smaller buffer.

If your emergency fund needs a boost – or worse, is non-existent – check out these 5 tips to build one in a hurry.

6. Will Your Family Be OK If You Die?

I get it. Death is not a pleasant subject.

But you know what would be even worse than your unexpected death?

If your unexpected death left behind helpless loved ones who relied on your income to survive.

Sure, chances are nothing will happen. The hard to swallow truth is it’s 100% out of your control.

But protecting your family’s financial interests if you die is completely within your control thanks to protection offered by life insurance.

Most experts recommend carrying ten times your annual income in term life insurance (avoid whole life and universal life policies like the plague – trust us). It may sound expensive – it’s a common myth that life insurance is unaffordable – but the truth is that the average adult can purchase a 20-year, $250,000 level term policy for the monthly cost of a large pizza.

Before our son was born in early 2018, I purchased additional term life insurance.My active, somewhat-athletic lifestyle helped me save at least $200 per year on a 20 year level term policy.

I’ll be honest – I didn’t want to go through the hassle, but big milestones and transitions can often provide the motivational spark needed to protect your family.

These days, the fastest and most simple way of getting a no pressure life insurance quote is through Ladder. They’ll help you figure out how much life insurance you need to protect your family while offering the most competitive rates we’ve ever seen.

If you don’t have life insurance, stop reading and get a policy in place right now.

7. How Well Did Your Investments Perform?

The end of the year is a smart time to check in on your investment portfolio performance, especially if you’re what I like to call a Crock Pot investor – you “set and forget” your investments.

Why?

If you do plan to make any changes, the tax implications may be easiest to sort out around this time of year – though you definitely should double check that with a tax pro, especially in light of 2018 tax law changes.

I rely on my FREE Personal Capital account to monitor my investments. And even though I don’t take advantage of their professional investment advice, it is comforting to know that a customized consultation is only a phone call away.

Of course, if you’re looking to hit the ground running in 2019 as a newbie investor, getting started with Acorns is always an easy entry-level option, especially if you only have a few dollars to invest here and there.

They’ll even give you a $5 welcome bonus.

8. Are You Organized for Tax Time?

This wouldn’t be a complete financial checkup if we didn’t ask you to look ahead to April 15, right? And don’t even try to tell me you’re relying on an extension due to the government shutdown — because it’s not happening.

You can take a lot of the stress out of tax time if you start organizing your important documents now. And you may be able to save money on your taxes if you file them sooner rather than later.

How was your financial checkup? What areas do you need to work on in 2019? Let us know in the comments below!