Your once-a-year money check-up

Resources · Life and money · 5 min read Building

Key points

• A yearly money check-up means setting aside a few hours, once a year, to look at your whole money picture.
• You go through your debts and savings, your regular bills, your insurance and your important paperwork.
• Small things you catch in a check-up can add up over a year.
• Finish with two or three clear goals for the next 12 months.

Why a yearly money check-up helps

Day to day, money is mostly about getting through the month. You rarely get to step back and see the whole thing. Meanwhile prices creep up and rates change. Life moves on, and arrangements that suited you once stop fitting.

A yearly check-up is your chance to catch that drift. Pick a date you’ll remember, like your birthday, the new year or the start of your tax year. Put it in your calendar. Today.

You don’t have to fix everything in one sitting. The point is to see where you are and choose what to work on.

1. Your debts

List every debt with its balance, interest rate and monthly repayment. Then hold it up against last year’s list.

Is each balance actually going down? Has any rate changed? Look hard at anything where you’re only paying the minimum, and at any debt that’s new since last year.

Balances standing still, or debt growing, is a sign to look closer. And if you can’t see a way to keep up with repayments, free debt help is confidential and costs nothing.

2. Your savings

Look at how much you’ve saved and what it’s earning.

Savings rates vary a lot between accounts, and over time. Here’s an example of why it pays to check, with these assumptions: $10,000 saved for one year, interest compounded monthly, no deposits or withdrawals.

That’s $357.30 more in a year, on exactly the same money. The rates are examples only, not current offers. The same maths works in any currency.

While you’re here, check your emergency buffer. Do you have one, and how many months of essential costs would it cover? And if you set savings goals last year, are you on track?

3. Your regular bills

Take a recent month of statements and write down every regular payment. Housing and energy, phone and internet, insurance, subscriptions. All of it.

Prices often rise without anyone telling you. A bill that goes up by $12 a month costs you an extra $144 a year. So watch for introductory deals that have quietly ended, plans that no longer match how you actually use them, and subscriptions you’ve stopped using but still pay for.

In some places you can compare providers for energy, phone and internet. Switching can save money. Some people would still rather stay put for the convenience or the service, though. It depends what matters to you.

4. Your insurance

Life changes. Your cover should keep up.

Does your home or contents cover match what you own now? Has anything happened that affects your car, health, life or income cover? You might be paying for cover you no longer need, or missing cover you do.

Note when each policy renews, too. Renewal prices can rise, so it helps to check before they roll over.

5. Your credit report

In many countries you can get a copy of your credit report, often for free. Credit report agencies such as Equifax, Experian and TransUnion operate in several countries.

Read it properly. You’re looking for accounts you don’t recognise, mistakes in balances or payment history, and old debts that should have dropped off by now. If something’s wrong, the agency will have a process for disputing it.

6. Your paperwork and plans

The boring bit. Do it anyway.

Start with your will. Do you have one, and is it up to date? Then check the beneficiary names on your retirement accounts and insurance policies, especially after a marriage, a separation or a new baby.

Know where your important documents are, and make sure someone you trust knows as well. And think about passwords and access: how would someone manage your money if you were unwell?

7. Your income and tax

Has your income changed since last year? If it has, your budget should show it.

Check whether you’re claiming the tax deductions, credits or benefits you’re entitled to. And look at your tax withholding. If you’re landing a big bill or a big refund every year, it might not suit you.

Tax rules vary widely between countries, and they change often.

Set two or three goals

Finish by picking a small number of goals for the year ahead. Make them specific. For example:

• Pay off a particular card.
• Build an emergency buffer to one month of essential costs.
• Cut regular bills by a set amount.

Write them down. Then put a note in your calendar to check how you’re going halfway through the year.

Common questions

What should a yearly money check-up include?

Many people go through their debts, savings, regular bills, insurance, credit report, paperwork, and income and tax. Then they finish with two or three clear goals for the year ahead.

When is a good time for a money check-up?

Any date you’ll remember. Your birthday, the new year or the start of your tax year all work. Put it in your calendar.

How long does a money check-up take?

Many people set aside a few hours or an afternoon. You don’t have to fix everything in one go.

Try it

Find your Freedom Date to see when your debts could be cleared, and compare it with last year’s. The budget calculator can help you plan the year ahead.

General information only, not financial advice. Your situation is your own.