Year-End Checklist: 6 Personal Finance Areas To Review Before 2024 Is Over

The end of a year is often marked by reflection and contemplation. Just as companies would conduct year-end financial reviews or people would get annual health checks, we should also take this opportunity to have a personal review of our finances. 

By doing so, we get a summary of our financial situation for the year, know where we stand and make plans for the following year. 

Here are six personal finance areas that we can look at before the year is over. 

Financial Goals 

With the year coming to a close, it would be timely to assess our financial journey whether we’ve made breakthroughs, progress or encounter challenges and identify areas for improvement.

Additionally, in the new year, we may have different financial goals. The onset of the calendar oftentimes motivates us to create new goals. If a major life event occurred recently, we will need to adjust our financial goals according to it. 

For example, in your 20s, you may be more focused on repaying your education loan. And after spending some time to settle your debts, you can then prioritise other goals such as saving for your retirement. If you’re in your 30s and starting a family, you will have another set of priorities such as saving for your children’s education. 

Budget

Nowadays, it has become easier to review the inflow and outflow of our money, whether it’s using a budgeting app or organising your financial data on worksheets. Then, we can determine if we’ve been spending within the budget or overspending. If you’re spending more than you make, then you need to take steps to manage your money better such as cutting back on things. 

You can also take this opportunity to review all your outstanding debts. You can pull your credit reports to learn how well you’re managing your debts. The higher the credit score, the better you’re at repaying your debts. Besides, it’s also important to review your credit report periodically and check if the information is accurate. If you notice application of credit cards that you didn’t initiate, this could be the doing of an identity theft. 

Insurance 

As mentioned previously, our financial situation changes as we go through different life stages. With that, it’s probably beneficial to assess our insurance coverage from time to time as well.  

If you’ve just bought a property, you may want to consider comprehensive home coverage. For those who are starting a family, you can also consider maternity insurance or life insurance to protect the financial future of your loved ones. 

Investments 

It’s also important to review your investment portfolios from time to time to ensure that they are aligned to your objectives. With the unpredictable economy, the value of your assets may be different as time goes by. 

When reviewing your investments, you can look at your asset allocation and consider if you’re exposed to too much risk than you want to be.  You could also check your portfolio performance and identify assets that are underperforming and may require closer scrutiny.

Throughout the years, your financial needs and risk tolerance will differ as well so you may need to adjust your investments accordingly.   

Retirement Savings 

With long-term goals such as saving for retirement, it’s important to check your progress periodically so you’re aware of where you stand currently and stay focused. 

You can determine how much retirement savings you need by utilising retirement calculators or the EPF’s Retirement Income Adequacy (RIA) framework to determine the amount of savings you need. The EPF’s RIA framework lists the retirement savings amount that you need to achieve at different ages.

The retirement savings you will need will depend on several factors including when you expect to retire and your expected monthly expenses after retirement. Once you’ve determined your retirement savings target, you can calculate how much you need to contribute to your retirement fund each month.  

Estate Planning 

One of the less thought about personal finance areas is estate planning but it doesn’t mean that it’s less important. An estate plan lays out legally-valid instructions for how you want your assets to be handled after your passing. 

You can start planning your estate by taking stock of your assets and liabilities and draft a will detailing how you want your matters to be handled. Additionally, you need to gather your life insurance policies and retirement plans so that your executor or family can claim from the insurance companies.

If you already have an estate plan, you may want to check if all you assets are already included or if you need to make changes or updates changes to the beneficiaries or the way you want your assets to be handled. 

Read Also: 10 Personal Finance Websites In Malaysia You Need To Follow 

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