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Your complete financial year-end checklist

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A year-end financial checklist is a great way to get your finances in shape before the start of the new year and can help you reflect on what’s working and what can be improved. The checklist depends on your financial needs and what you want to achieve. Everyone should routinely inspect their finances over time to ensure they are on track to meet their goals. Keep these ideas in mind when creating your end-of-year financial planning checklist.

Woman writing down list on a notepad while holding her smartphone in the other hand.
Yellow notepad with pen svg icon Lesson notes:
  • The end of the year is a great time to review your finances, including your budget, investments, retirement funds and credit report.
  • Spend some time reviewing various financial materials to see whether your situation has changed in the last year.
  • Some financial goals could be to pay off your debts and increase your net worth year after year. Adjust your lifestyle and spending habits to reach your goals on time.

Adjust your budget

Create a budget by comparing your after-tax income to your total monthly expenses if you haven’t done so already. You should earn more than you spend every month—if not, you are living beyond your means and need to adjust your spending habits and see what expenses you can cut back on.

If you already have a budget, use this opportunity to see if your current budget plan is working for you. Review your expenses over the last year to see if you spent more or less than you were expecting.

One example of a budget uses the 50/30/20 model, which means 50% of your income goes toward needs like food and rent, 30% goes toward your wants, and 20% goes toward savings and paying off debt. Continue to adjust these percentages as needed based on your financial goals.

The cost of living increases every year, so you may need to reduce your spending if your income hasn’t kept pace with inflation. You should also reduce your expenses if you are saving toward a particular goal, such as a down payment for a mortgage, car loan, getting out of debt or starting your own business.

If you have savings goals, see if you saved as much as you expected over the last 12 months. If your situation or goals have changed, you may need to save even more every month.

For example, the cost of a home in your neighborhood may have increased in the last year, which means you now need to save even more for a down payment. Taking a vacation in the new year may also be more expensive than your original budget allows.

If you need more money to reach your financial goals, revise your budget accordingly and see what you can just in your spending categories.

Check your credit score and report

Your credit score is a factor in determining your ability to get a low-interest loan. You should always work toward improving your credit score by making regular, on-time payments and using credit responsibly.

Take some time to check your credit score to see if it has changed in the last year. Many credit card companies and financial service firms have tools that let you check your score for free.

You can also request a free copy of your credit report from each credit bureau every year at AnnualCreditReport.com. Your report contains detailed information about your financial transactions. Go through the report to see how your spending has affected your credit. Report any errors or inconsistencies to all three of the major credit reporting bureaus. 

Look toward paying off your debts

While not all debt is bad debt, freeing up more income by paying off debt starts with a realistic budget and doing your best to stick with it.

Use this opportunity to review your progress in paying off your debts to see if you are on the right track. Compare your progress to previous years. As your income increases, you should aim to put more money towards your debts every year.

If any of your loans have an adjustable interest rate, see if the APR has changed in the last 12 months. Calculate how long it will take you to pay off your loans based on your current repayment plan to see if the timeline has changed.

If you have fallen behind or temporarily stopped paying your loans, contact the financial institution and work with them to get a payment plan in place.

Check in on your retirement fund

If you haven’t already started saving for retirement, now’s the time. If you have access to an employer-sponsored 401(k) plan, make sure you’re taking advantage any employer’s matching benefits. If you don’t have access to a retirement plan through work, consider opening an induvial retirement account (IRA).

Take stock of your current retirement plan to see if you are on track to retire by a certain age. Many people have had to put off retirement amid record inflation, so consider saving more for retirement every year.

Review your investments

The value of your investments is always changing based on the stock market. While you probably don’t need to check your investments on a daily basis, it can be helpful to review them at least once a year to check the value and see how it has affected your net worth.

Review your current holdings to see how they performed in the last year and refine your approach as your needs change and when the economy grows or shrinks.

It’s always best to have a diverse asset allocation, but you may need to adjust your percentages over time. Experts recommend taking on less risk as you get closer to retirement, which often means investing more of your money in less risky investments such as bonds, instead of stocks.

Speak to a financial expert

Going over all your finances at the end of the year can be overwhelming, especially if you have recently lost income or are struggling to make ends meet amid inflation. But that doesn’t mean you should avoid reviewing your finances altogether.

Speaking to a financial advisor will help you make sense of your current situation and financial goals to see if you are on the right track. If you can’t afford to meet with an advisor (some have fees and/or investment minimums), look for free or low-cost financial coaching services. An expert can help you find additional benefits and low-cost lending programs that can improve your situation.

Your finances have likely changed quite a bit in the last 12 months. Go through your budget, investments and financial goals to get a better sense of where you are headed if you continue on the current trajectory. Consider adjusting your lifestyle and spending habits going forward to reach your goals on time.

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