Think of your finances as a road trip. You’ve got your destination in mind and a route planned out, but without occasionally checking your GPS, you might find yourself miles off course without even realizing it. That’s what happens when you neglect regular financial reviews – small detours become major diversions, and suddenly your retirement dreams are recalculated to “arrival time: much later than expected.”
Annual financial reviews serve as your financial GPS check-in, helping you confirm you’re still headed in the right direction or recalibrate if necessary. Yet despite their importance, many people avoid these reviews, treating them like an unwelcome dental appointment rather than a powerful opportunity to strengthen their financial health. When done right, this yearly practice can transform your relationship with money from one of uncertainty to one of confidence and control.
What Exactly Is an Annual Financial Review?
An annual financial review is a comprehensive assessment of your complete financial picture, typically done once a year. Unlike simply checking your account balances or paying bills, a true financial review takes a comprehensive approach.
During a review, you’ll examine your income, expenses, investments, insurance coverage, debts, emergency savings, and progress toward financial goals. Think of it as your personal financial State of the Union address – a moment to honestly assess where things stand and make necessary adjustments for the coming year.
Why Annual Reviews Matter
They Prevent Financial Drift
Without regular reviews, your financial habits tend to drift off course. That gym membership you haven’t used in eight months? Still charging your card. The investment allocation that made sense five years ago? Might be completely wrong for your current age and goals. Annual reviews catch these issues before they become significant problems.
A thorough review gives you clarity about where your money is actually going versus where you think it’s going. This awareness alone can lead to immediate improvements in your financial situation, often without requiring major lifestyle changes.
They Help Track Goal Progress
Goals without tracking are just wishes. Whether you’re saving for a home down payment, building college funds for your children, or working toward retirement, annual reviews let you measure your progress and adjust as needed.
Seeing your retirement account growing or your debt shrinking provides powerful motivation to continue your good financial habits. Conversely, recognizing when you’re falling behind helps you address problems early, when they’re usually easier to fix.
They Allow for Life Adaptation
Life changes constantly, and your financial plan should evolve alongside it. Major events like marriage, having children, changing careers, or approaching retirement all require financial adjustments. Even smaller changes like cost-of-living increases or shifts in your priorities deserve attention.
Annual reviews provide the perfect opportunity to help ensure your financial plan still aligns with your current life situation and future goals. Without these regular check-ins, you might be following a financial map designed for a life you no longer lead.
What to Include in Your Annual Review
Income and Expenses
Start by reviewing your income streams and spending patterns. Has your income changed significantly over the past year? Have your essential expenses shifted? Are there subscription services or other regular expenses that no longer provide value?
Look for spending categories that surprise you – the small daily purchases that add up to significant monthly costs often hide in plain sight until you examine them closely. This review isn’t about judgment but awareness and intentionality.
Debt Review
Take stock of all outstanding debts – mortgage, student loans, car payments, credit cards, and any other obligations. Note the current balances, interest rates, and monthly payments for each.
Are you making progress on debt reduction? Could you benefit from consolidation or refinancing? Are there high-interest debts you should prioritize paying down more aggressively? Your annual review is the perfect time to craft or adjust your debt management strategy.
Investment Performance
Examine your investment accounts, including retirement funds, brokerage accounts, and any other vehicles you use for wealth building. Look beyond account balances to understand performance relative to appropriate benchmarks and your personal goals.
Consider whether your asset allocation still makes sense for your age, risk tolerance, and timeline. Sometimes the best action is no action, but you won’t know that without reviewing. Also check that you’re capturing all available employer matches and other “free money” opportunities.
Insurance Coverage
Insurance needs evolve as your life changes. Review all your policies – health, life, disability, auto, home/renters, and any specialty coverage.
Are there gaps in your protection? Are you over-insured in some areas? Has your net worth grown to a point where additional coverage makes sense? Insurance is often overlooked during casual financial check-ins, making your annual review especially important for this essential safety net.
Making Your Review Productive
Gather Documents Ahead of Time
Before sitting down for your review, collect all relevant financial statements: bank accounts, investment accounts, retirement plans, loan statements, insurance policies, last year’s tax return, and a recent credit report. Having everything at your fingertips makes the process much smoother.
Digital tools can streamline this process considerably. Many financial apps and services can automatically aggregate your accounts, categorize transactions, and generate reports that make patterns and trends easy to spot.
Ask Key Questions
Throughout your review, focus on these essential questions:
- What worked well financially this past year?
- What didn’t work or caused financial stress?
- Have my goals or priorities changed?
- Am I on track for major financial milestones?
- What one thing would most improve my financial situation?
These questions help focus your review on action and improvement rather than just data collection.
Create Concrete Action Steps
A review without resulting action is just an interesting conversation. Conclude your annual financial check-in by identifying 3-5 specific actions to take in the coming months.
Perhaps you’ll increase your retirement contributions by 2%, create a plan to pay off a specific debt, or schedule meetings with your insurance agent to update your coverage. Whatever your priorities, convert them into scheduled, concrete tasks with deadlines.
Work With Us
Annual financial reviews transform vague money worries into clear understanding and action. By taking just a few hours each year to thoroughly assess your financial position, you gain the power to make informed decisions, correct course when needed, and confidently progress toward your most important goals. This simple habit differentiates those who merely hope for financial well-being from those who actively create it.
At Brogan Financial, we understand that life gets busy, and periodic and thorough financial reviews often fall to the bottom of your to-do list. That’s why our team of experienced advisors specializes in guiding clients through comprehensive reviews that leave no stone unturned. We help identify opportunities you might miss on your own, provide objective feedback on your progress, and work with you to develop clear action steps tailored to your unique financial situation. Contact Brogan Financial today to schedule your annual financial review and take control of your financial future with confidence
