10 Steps to Conduct a Successful Financial Checkup

What Clients Want From Their Financial Advisor

Every few months, my husband and I make it a point to sit down and review our finances to ensure we’re aligned and everything is running smoothly.

Even though things are usually on track, it’s always wise to take a comprehensive look at your financial situation to determine if adjustments are needed in your spending, budget, or goals.

If you’re seeking advice on how to conduct a successful financial checkup, follow these 10 steps. You’ll gain clearer insights into what actions you need to take to achieve your financial objectives.

1. CHECK YOUR RETIREMENT CONTRIBUTIONS

Even if retirement isn’t your top concern, at least contribute enough to get your company’s match if available. Aim to increase your contribution by at least one percentage point each year. This small adjustment is often unnoticeable in your paycheck, especially if you receive annual raises.

If meeting the company match isn’t feasible, start a retirement plan and contribute whatever you can, even if it’s just $50 a month. The sooner you start, the better, as retirement savings grow over time.

2. REVIEW YOUR BUDGET (OR START ONE)

Examine every line item in your budget to ensure it works for you. If something hasn’t been working for the past few months, identify and fix the issue.

Adjust your budget as needed, whether it means increasing your grocery budget and reducing your entertainment budget or vice versa. Your budget should serve you, so tailor it to your needs.

3. SPEND ON WHAT’S IMPORTANT TO YOU USING VALUE-BASED SPENDING

While reviewing your budget, check where your discretionary funds are going. Do these expenses align with your values? Are you spending money on what truly matters to you?

For instance, if you notice you’re spending too much on clothes but rarely wear them, consider redirecting that spending to something more meaningful, like a date night with your partner.

Being honest with yourself about your spending habits ensures that your money is used in ways that bring you the most satisfaction.

4. HAVE A FINANCE DATE WITH YOUR SPOUSE

Though it may not sound exciting, regular financial check-ins with your spouse are essential unless you’re married to a billionaire (and most of us aren’t).

Discuss your budget, spending habits, and any necessary changes. Talk about saving for goals like a vacation. Having these conversations helps prevent conflicts over money and keeps you both on the same page with your financial plans and goals.

5. REVIEW YOUR EMERGENCY FUND

Hopefully, you have an emergency fund for unexpected expenses, from job loss to minor repairs. If not, start one immediately.

If you already have an emergency fund and haven’t used it in a while, reassess the amount saved. You might consider reallocating some of it to pay down high-interest debt, but avoid spending it on unnecessary purchases.

6. START INVESTING

If you have a retirement account, you’re off to a good start. Consider opening a taxable investment account as well. If investing seems daunting, there’s plenty of information online and at libraries.

A simple way to start is by investing in index funds, which are low-cost and low-risk. They follow the market and, while not a get-rich-quick scheme, they offer relatively safe growth through compound interest over time.

7. REVIEW YOUR LONG-TERM GOALS

Regularly review your long-term goals to ensure you’re still working towards them. It’s okay if your goals change over time; just make sure you and your partner are aligned and your goals are still relevant.

8. TRACK YOUR NET WORTH

Tracking your net worth helps measure your progress toward financial goals. If you’re not already doing so, start tracking it now and update it quarterly. Keeping track of your net worth over time provides a clear picture of your financial growth.

9. CONSIDER CUTTING THE CORD

Cable television is expensive and can waste valuable time. Cutting the cord can benefit your wallet and free up time for more meaningful activities, like spending time with loved ones or starting a side hustle.

Reducing TV time can increase your happiness and productivity.

10. CONSIDER DOWNSIZING YOUR SPACE OR BELONGINGS

Downsizing has become popular in recent years. Reducing your possessions and living space can benefit the environment, your finances, and your well-being.

If downsizing isn’t possible, at least try to declutter. Letting go of unnecessary items can make your home easier to clean and more comfortable, saving you money and time in maintenance and storage.

Regular financial checkups are essential. Don’t assume everything is fine; make financial reviews a part of your routine to ensure everything stays on track.

Leave a Reply

Your email address will not be published.