The Importance of Regular Financial Reviews and How to Conduct Them

You’d go to a doctor for a health check up, why not an expert for a financial check up?

Every successful journey requires periodic check-ins to ensure you’re on the right track. The same is true for your financial journey.

Much like a doctor’s check-up or a car’s tune-up, regular financial reviews are essential to ensure you’re on the right path to achieving your financial goals. Here’s why they are important and how you can conduct them effectively.

Why Regular Financial Reviews Matter

Stay Aligned with Your Goals: Life is full of unexpected twists and turns. Maybe you’ve changed jobs, started a family, or moved houses. As your life evolves, your financial goals and needs may shift too. Regular reviews help realign your financial strategies with your current goals.

Monitor Your Spending: It’s easy to stray from a budget, especially when life gets busy. By periodically reviewing your finances, you can identify areas where you might be overspending and make necessary adjustments.

Optimize Investments: The market is ever-changing. An investment that was performing well a year ago might not be the best option now. Regular reviews help you assess your investment performance and rebalance if needed.

Plan for the Future: Whether it’s retirement, buying a home, or supporting a child’s education, timely reviews ensure you’re saving and investing adequately for future needs.

Conducting an Effective Financial Review

1. Set a Schedule: It’s easy to forget about financial reviews amidst daily life. Set a specific time, whether it’s quarterly, bi-annually, or annually. Mark it on your calendar, set a reminder, and commit to it.

2. Gather Your Financial Documents: Before your review, gather relevant documents. This might include bank statements, credit card bills, investment summaries, loan statements, and any other financial documents.

3. Assess Your Budget: Begin by comparing your actual spending to your budget. Identify areas where you consistently overspend. Maybe you’ve been dining out more than you planned or your utilities have increased. Adjust your budget accordingly.

4. Review Your Debts: Make a list of all your debts, including credit cards, loans, and mortgages. Check the interest rates, and consider if you might benefit from refinancing or consolidating.

5. Examine Your Investments: Look at the performance of your stocks, bonds, or mutual funds. Are they meeting your expectations? Consider rebalancing if one area is outperforming another.

6. Check on Retirement Contributions: Ensure you’re maximizing any employer match for retirement funds and assess if you’re on track for your retirement goals.

7. Update Beneficiaries and Insurance: Life changes, like marriage or the birth of a child, might mean you need to update beneficiaries on accounts or policies. Review your insurance policies to ensure they’re still fitting your needs.

8. Set New Goals: Maybe you’ve achieved some financial goals (congratulations!), or perhaps you’ve set new ones. Adjust your financial strategies to support these goals.

9. Consider Professional Advice: If you’re uncertain about certain aspects of your finances or want a second opinion, consider meeting with a financial advisor.

10. Summarize and Plan: Conclude your review by summarizing your findings. What changes do you need to make? Set clear action steps and follow through.

Regular financial reviews can be the difference between achieving your financial dreams and constantly playing catch-up. Especially for middle-class women juggling various responsibilities, these check-ins ensure that even amidst life’s chaos, your finances remain a priority. It allows for adjustments, informed decisions, and peace of mind, knowing you’re actively steering your financial ship in the direction you want.

Remember, the journey to financial wellness isn’t a sprint; it’s a marathon. And just like any long race, periodic checks ensure you’re on the right path. So, take out your calendar, mark your financial review date, and take proactive steps towards a financially healthy future.

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