A Birthday Gift That Keeps on Giving

January 23, 2015 - Christen
Each year before my birthday, I try to think of the gift I want to give myself to commemorate my special day. This year, instead of spending money on something that I'll likely grow tired of before the end of the year, I'm going to review the financial goals that I made on my birthday last year to see how my current situation measures up to the goals I had set for myself. Over the past year, my financial responsibilities have changed, so I will take that into account.
 
For me, the goal of this exercise is to look at where I should congratulate myself on the progress I’ve made, make adjustments where necessary, and develop new goals for the next 12 months. I've listed the steps I plan to take below:
  • Take stock of my financial assets. This includes my checking, savings, and retirement accounts, as well as my emergency fund. Knowing where my funds are saved and how much I have in each account is helpful information in case I need to consolidate or close accounts.
  • Review my financial liabilities. Credit-card balances, my mortgage, and my student loans are all financial liabilities that have the potential to delay me from reaching some of my financial goals. Knowing my assets and liabilities is helpful in figuring out when I'll be able to pay off a debt, or if making additional payments will help me reach my goals even faster.
  • Assess my insurance policies. Keeping track of homeowners, life, and health insurance policies (as well as other policies) and knowing what my deductibles are and other details can help determine if there is a need to decrease or increase coverage amounts.
  • Develop my goals for the next 12 months. This will include an updated plan for reaching my retirement and personal savings goals, and college savings goals for my children.
Think about gifting yourself time to review your financial situation.
 
Share your approach. Do you review and update your goals annually? If not, how often? How do you evaluate whether you’re reaching your financial goals?
 

AC: 1214-7522

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