Money Management

Annual Financial Checklist: 24 Simple Ways to Optimize Your Finances

Annual Financial Checklist
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As nice as it would be to “set it and forget it,” the truth is that optimizing your finances needs to be a continual process — at least if you want to save as much money as possible and get the best return from your investments.

Fortunately, that process doesn’t have to be a burden, as some of the most valuable steps — from shopping for lower insurance rates to rebalancing your retirement portfolio — take just a few minutes of your

Plus, spacing them out over the course of the year will help you stay more connected to your financial life, giving you better insights into where things stand and the confidence that comes with knowing you’re on the right track.

The Ways To Wealth’s 12-Month Financial Checklist

Here’s a practical 12-month checklist that will help you keep your finances organized and optimized.


#1. Set your financial goals. Determine what you’ll focus on this year. Use Dave Ramsey’s baby steps as a rough guide to determine your primary goal — whether that’s paying off debt, building an emergency fund, increasing your savings rate, or something else.

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#2. Set your career goals. How will you increase your value in the professional marketplace this year? Will you look for a new job at a higher salary, or do you need to ask for a raise? Should you take on a side hustle and, if so, should you try to parlay it into a full-time gig? Decide now what you want to accomplish by the end of the year.


#3. Review your expenses. Think about where you might be able to save money, starting with whether it makes sense to refinance any existing debt. You can often save hundreds or thousands of dollars by consolidating your credit card balances or your student loans, or by refinancing your mortgage. It may not always be the right time to take those actions, but checking annually means you’ll never miss a valuable opportunity.

Another great way to reduce your expenses is by canceling unwanted subscriptions. One study found that the average American spends nearly $275 on subscriptions, on things ranging from home internet to dating apps to pet subscription boxes.

Even more disturbing: that figure was nearly $150 more per month than people thought they were spending on those products and services.

The beginning of a new year is a great time to comb through your subscriptions and cancel what you don’t want or aren’t using (do you really need Netflix, Hulu and Disney+?).

If you want to make the process as easy as possible, one solid app worth checking out is Rocket Money, which can cancel subscriptions on your behalf and even negotiate lower rates on many of your bills.

You can read more about the app in my Rocket Money review.

#4. Review your credit report and credit score. Once a year, you can get a free copy of your credit report from the government-run website

Next, sign up for a free credit monitoring service like Credit Karma, which will alert you whenever there’s a change to one of your accounts, or when someone tries to open a new account in your name. (Learn how it works in our Credit Karma review.)

Checking your credit regularly is important because around 20% of Americans have an error on their report, according to the FTC.

And even one mistake — a bill that you paid on time being marked as past due, for example — can lower your credit score enough to cost you money on everything from auto insurance to debt refinancing.


#5. Take on a money-saving challenge. One of the fastest and most effective ways to whip your finances into shape is by accepting a “challenge” — a pre-designed regimen that spells out specific actions you’ll take over a particular period of time. One example is the popular 52-week saving challenge, in which you save $1 the first week, $2 the second week, and keep adding $1 every week until the end of the year.

Here’s an article outlining eight of my favorite money-saving challenges and why I think they’re helpful.

#6. Review your banking and investment fees. The fees on your investment accounts — most notably any 401(k)s from past employers — can be shockingly expensive and can eat away at your returns.

Unfortunately, those fees can be hard to identify and calculate, so I recommend using Empower’s free fee analyzer.

You just sign up, link your accounts, and let the service ferret out what you’re actually paying. With that information in hand, you can think about whether it makes sense to move your accounts from one provider to another.

Bank fees are usually easier to understand than investment fees, but they can also be quite steep. If you’re paying a monthly fee for a checking or savings account, consider switching to a no-cost provider like Chime.

Chime has no monthly fees, no minimum balances, and you can even get early access to your paycheck if you have direct deposit set up.

Further reading: Chime Review — What to Know Before Signing Up.


#7. Reevaluate your goals. The end of the first quarter is a great time to review the progress you’ve made towards the goals you set in January. If you’ve completed them, set new goals and move on to the next highest priority tasks.

If you haven’t, be honest with yourself about what went wrong. Did you take steps that didn’t work? Did you set your goals but fail to follow through? There’s no shame in having fallen short, but the key to course correction is the willingness to look realistically at the flaws in your current approach.

#8. Increase your savings rate. One quick and easy win is periodically ramping up the amount you contribute to your 401(k), IRA or taxable account by 1%. This may not seem like much… and that’s exactly the point.

Increasing your savings rate a little bit at a time makes doing so almost painless. You’ll hardly notice 1% less in your paycheck, but you will absolutely notice the difference those funds make in your savings and investment balances down the road — especially since they compound over time.


#9. Spend your tax rebate wisely (or don’t spend it at all). It can be hard to avoid the urge to splurge when you get a big fat check from Uncle Sam, but remember this: for the most part, that’s not free money… it’s money that you already earned, paid, and are getting refunded. If you wouldn’t have spent that money out of your paycheck, you probably shouldn’t spend it now.

Instead, apply it to the goals you defined in previous steps. For many people, their tax rebate can take a huge chunk out of their existing debt. That may not be as much fun as a vacation, but it can lower your monthly expenses, reduce the amount of interest you’ll pay over time, and lessen your overall financial stress.

#10. Adjust your tax withholding. Depending on how you did on last year’s taxes, you may want to adjust your state and federal withholding allowances. In other words, if you ended up with a larger than expected tax bill, avoid that jolt next April by telling the government to hold onto a little bit more of your money for tax purposes.

Resource: How to adjust your tax withholding, via the IRS.


#11. Read a personal finance book. There’s a lot to learn about personal finance, and the more you know the better your financial results will be. Make a point to read at least one book per year.

If you’re not sure where to start, here are some of my recommendations:

#12. Do a mid-year clear-out. The start of summer makes a great time to go through your garage, shed or storage unit and get rid of some of your idle assets — things you own that are worth money, but which you’re not using.

Host a garage sale (yes, they still work) and sell big-ticket items on sites like Craigslist. Then, don’t be afraid to donate anything you can’t sell that’s just taking up space.


#13. Reevaluate your goals. Many people make New Year’s resolutions and start out strong, only to fizzle as the year progresses. That’s understandable — life is busy, things come up, and it’s easy to fall back into old routines.

That’s why it’s so important to periodically circle back and check your progress; doing so helps restore your focus and hold yourself accountable. You checked your progress in April (after the first quarter of the year), so check it again in July (after the second quarter).

#14. Increase your savings rate. Back in April, you created a specific plan for ramping up your savings rate. Now it’s time to follow through and add whatever percentage you settled on.


#15. Review your employee benefits. Not everyone takes full advantage of the saving and investing opportunities offered by their employer, which is like tossing money out the window.

If your company offers a thrift savings plan with an employer match, consider whether it makes sense to up your contribution to that in addition to your 401(k). If your employer offers an FSA, strongly consider signing up it. And don’t forget about smaller-scale savings, like discounted gym memberships and services (you may be able to get 20% off your wireless phone service, for example).

#16. Shop for your insurance. Changing your home, renter’s, or auto insurance can be one of the fastest ways to save substantial money.


#17. Evaluate your will and estate plan. Nobody likes thinking about this kind of thing, but if you have a family, it’s important to make sure they’re protected and that everything is as smooth as possible in a worst-case scenario.

If you don’t have a document that outlines what should happen to your assets if you pass away, then commit to creating one. If you do have one, you need to review it annually as your life circumstances change; things like new children and inheritances can dramatically alter your overall financial picture.

Most people don’t need to hire an expensive lawyer to help with this. Services like Trust & Will allow you to create or edit your estate-planning documents online for a low cost. You can read more about how it works in my Trust & Will review.

And if you don’t have a life insurance policy, this is a great time to get one. As with an estate plan, a policy with good coverage doesn’t have to cost a fortune. Check out my life insurance buyers’ guide to learn how to get the best deal.

#18. Tackle another money challenge. If you conquered the challenge you accepted back in March, why not take on another? These challenges are a great way to jolt yourself into better financial behavior, so it’s smart to make them a regular part of your money regimen.


#19. Reevaluate your goals. You didn’t think you were off the hook yet, did you? The end of another quarter means it’s time to take another hard look in the mirror.

#20. Increase your savings rate. This is the third time you’ve upped your savings rate this year. If you committed to 1% or more, you’ve already substantially improved the health of your retirement account.

In fact, if you keep up this pace for just five years, you can go from zero to the benchmark saving rate of 15% with almost no effort.


#21. Review your beneficiaries. Take a quick look at the beneficiaries — the person(s) you name to receive your assets if you were to pass — on all your financial accounts, making sure to insert both a primary and secondary beneficiary.

#22. Plan your health expenses. If you’ve reached your deductible with either your medical or dental insurance provider, schedule any additional appointments and procedures for this year. And if you have an FSA, make a plan to use any remaining funds (if you don’t, they disappear).


#23. Rebalance your portfolio. One of the most common investing mistakes people make is improper asset allocation. Use Empower’s free portfolio optimizer to see where you stand. Also, take this time to evaluate whether there are any tax-loss harvesting opportunities to take advantage of.

#24. Give. Now is the time to give to a qualified charity of your choice and deduct it on this year’s taxes. Keep in mind, the standard deduction for the year 2019 increased to $12,200 for single filers.

For those who file jointly with their spouse, it’s $24,400. If you take the standard deduction (as most taxpayers will), you won’t itemize your deductions and thus won’t get credit for your charitable giving.

R.J. Weiss
R.J. Weiss, founder of The Ways To Wealth, has been a CERTIFIED FINANCIAL PLANNER™ since 2010. Holding a B.A. in finance and having completed the CFP® certification curriculum at The American College, R.J. combines formal education with a deep commitment to providing unbiased financial insights. Recognized as a trusted authority in the financial realm, his expertise is highlighted in major publications like Business Insider, New York Times, and Forbes.

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