On a quarterly basis, my spouse and I have a scheduled meeting to overview our financial status, ensuring we’re aligned and maintaining a smooth financial flow. We generally find our finances are in order, but it’s valuable to regularly assess your broad financial landscape, deciphering whether adjustments to spending habits, budgets, or objectives are necessary.
If you seek guidance on conducting an effective financial review, follow these 10 steps. This process will provide a clearer picture of your financial health and the actions required for desired progress.
1. ASSESS YOUR RETIREMENT FUNDING
Retirement saving shouldn’t be a cause for concern. Initially, at least match your company’s contribution if it provides one. Subsequently, aim to increment your contribution by minimum one percent annually, a minor change unlikely to dent your paycheck. If attaining your company’s match is challenging, initiate a retirement plan and make modest contributions.
2. REEVALUATE YOUR BUDGET OR CREATE ONE
If your budget has components that seem ineffective, go through your records to trace the issue and resolve it. Your budget should be tailored for your specific needs.
3. PRIORITY-BASED SPENDING
While reviewing your budget, ensure your discretionary income aligns with your core values. Alter your spending habits to accurately reflect your desires.
4. SCHEDULE A FINANCIAL REVIEW WITH YOUR PARTNER
It’s key to periodically discuss budgeting and spending habits with your spouse. Achieving financial plans and goals as a couple can eliminate disputes over money with clear, unified financial goals.
5. EVALUATE YOUR CONTINGENCY PLAN
A sound emergency fund is a necessity to cover unexpected expenses. Review your emergency fund regularly and decide the optimal allocation of these resources.
6. BEGIN INVESTING
If you have a retirement plan in place, consider opening an additional taxable retirement account. If investment seems intimidating, numerous resources are available to help you commence, teaching you market basics.
7. REVISIT YOUR LONG-TERM OBJECTIVES
Ensure you’re continuously working towards your long-term goals. It’s crucial that these goals are still relevant, and if they’ve evolved, that everyone involved agrees with the new objectives.
8. MONITOR YOUR NET WORTH
Regularly computing your net worth is an effective method to monitor your progress towards your financial goals.
9. CONTEMPLATE DISCONNECTING CABLE
Cable television extensive costs a significant amount and it consumes a majority of your time. Eliminating cable can significantly reduce your expenses, freeing up time for more beneficial activities.
10. PONDER ON REDUCING YOUR LIVING SPACE OR POSSESSIONS
The recent trend of downsizing exhibits the minimal necessity for possessions. Reducing your belongings benefits the environment, helps you save money, and promotes mental health. Even if you aren’t ready to downsize, decluttering has numerous benefits.
Regular financial reviews are crucial to ensure your finances are in order. It’s perilous to assume all’s well without examining your financial status often. Make routine financial reviews a part of your financial reviews a necessity.
Do you frequently assess your budget and investments? Do both you and your spouse take part in managing the household finances?
