Your Annual Financial Planning Checklist

Creating an annual financial plan can be a daunting task, but it’s essential to help you achieve your financial goals. A comprehensive financial plan ensures that you are on track to meet your short-term and long-term financial goals, and it helps you stay organized and make better financial decisions. In this article, we’ll guide you through a comprehensive annual financial plan checklist that covers all the essential steps to take.


  • An annual financial plan enables you to assess your current financial condition.
  • It should entail assessing all of your assets and liabilities, determining your goals, and deciding how you want to reach them.
  • Check off each plan you considered, even if you decided not to pursue it.

What is an Annual Financial Plan?

An annual financial plan is a detailed plan that covers your present financial condition and assists you in determining your financial objectives. A budget, investment strategy, retirement plan, insurance coverage, and tax planning are all part of it. An annual financial plan’s purpose is to assist you attain financial stability and peace of mind by ensuring that you are on track to reach your financial objectives.

Financial Planning Checklist

Annual Financial Plan Check-up

The initial step on your annual financial plan checklist should be a thorough examination. Examine your existing financial condition, taking into account your income, expenses, and debts. Calculate your net worth and evaluate your financial progress to uncover areas for improvement. Examine your credit score, your insurance coverage, and your retirement assets.

Create Your Financial Inventory

Your personal financial inventory is vital since it provides you with a glimpse of your bottom line’s health. This annual self-check should include the following items:

  • A list of your assets, such as your emergency fund, retirement accounts, other investment and savings accounts, real estate equity, college funds, and so on (any valuable jewelry, such as an engagement ring, should also be included).
  • A list of your debts, which may include your mortgage, student loans, vehicle loans, credit cards, and other liabilities.
  • A credit utilization ratio calculation, which is the amount of debt you have compared to your overall credit limit.
  • Your credit report as well as your credit score
  • A review of your financial advisor’s fees, if any, and the services they deliver.

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Set Financial Goals

After you’ve assessed your financial situation, it’s time to start thinking about the future. Setting attainable financial objectives will help you achieve financial stability and secure your financial future. Your objectives should be divided into three categories: short-term, mid-term, and long-term.

Short-term goals may include:

  • Making a budget. There are numerous budgeting apps available to help with this process.
  • Creating an emergency fund or increasing your existing savings.
  • Getting rid of credit card debt.

Mid-term goals may include:

  • Purchasing life and disability income insurance to protect yourself and your loved ones.
  • Consider purchasing a first house or a vacation property, upgrading your present home, or saving for your children’s education.

Long-term goals may include:

  • Calculating how much money you’ll need to save for a comfortable retirement.
  • Investigating strategies to boost your retirement funds, such as by contributing to a 401(k) or an IRA.

Setting clear financial objectives allows you to map out your financial future and take meaningful actions toward financial security. Remember to evaluate your progress toward your goals on a regular basis and alter your strategies as needed.

Focus On Family

Your family’s financial well-being is also an essential aspect of your financial plan. If you’re married, there are some financial considerations you and your spouse should consider. Some of the items on your punch list may include:

  • Determine how much you’ll need to save for future college expenses if you have children.
  • Selecting the Best College Savings Account
  • If you are caring for aging parents, find out if long-term care insurance or life insurance can assist (and whether you should get one for yourself).
  • Getting life insurance for you and your spouse
  • Begin thinking about how you and your spouse will plan your retirement, including your Social Security claim approach.
annual financial planning checklist

Review Retirement Savings Plans

When it comes to saving for retirement, utilizing tax-advantaged accounts like individual retirement accounts (IRAs) and 401(k) plans can be a smart strategy. As you develop your yearly financial plan, there are several key considerations to keep in mind:

  1. Determine whether a traditional or Roth IRA is the best fit for your current financial situation.
  2. Consider switching your IRA to a different brokerage if it makes financial sense, taking into account any fees or potential benefits.
  3. Think about converting a traditional IRA to a Roth IRA during times when your income or account value is lower to take advantage of potential cost savings.
  4. Evaluate whether a Roth or regular 401(k) is the right choice for you.
  5. Roll over any old 401(k) accounts from previous employers to simplify your retirement savings and potentially gain access to better investment options.
  6. If you’re self-employed, be sure to stay up-to-date on the contribution limits for SEP IRAs or other self-employment retirement accounts and aim to maximize your contributions.
  7. Finally, consider adjusting your annual contribution amounts to retirement accounts as needed to meet your financial goals and maximize your tax benefits.

Review Your Investments

Assess your investment portfolio and review your asset allocation strategy. Evaluate your investment performance and determine whether any changes need to be made. Consider diversifying your portfolio to reduce risk.

Read Also – How to Conduct a Financial Checkup

Rebalance Your Portfolio

Rebalancing your portfolio on a regular basis ensures that you are not carrying too much risk or spending your investment money on securities that aren’t yielding a reasonable rate of return. It also ensures that your present portfolio reflects your investing strategy, as market movements frequently produce a shift that must be adjusted in order to preserve the diversification you intended.

  • Examine your portfolio’s asset classes to see where the gaps are. Refocus your investments if necessary to balance things out.
  • Consider your portfolio’s costs and whether it’s time to try a robo-advisor or another way to minimize them.

Address Tax Planning

When reviewing and adjusting your investment portfolio, keep in mind the potential tax implications of selling assets. If you sell investments for a profit, depending on how long you kept the assets, you may be obliged to pay short-term or long-term capital gains taxes. Here are some tax options to consider as the year comes to a close:

  1. Harvesting tax losses is swapping out lost investments for new ones in order to offset any possible capital gains and lower your tax burden.
  2. Offset capital gains and losses: In the same tax year, you may be able to use capital losses to offset capital gains, lowering your overall tax bill.
  3. Using appreciated securities for charitable donations or to support family members with lower income: If you have appreciated securities, you may be able to use them to make charitable donations or support family members with lower income. This can provide a tax benefit while also allowing you to support causes or people important to you.

By keeping these tax strategies in mind and consulting with a financial advisor or tax professional, you can take steps to minimize your tax liability and optimize your investment portfolio.

Read Also – How To Avoid Lifestyle Inflation

Your Financial Emergency Plan

The COVID-19 pandemic has brought to light the significance of having a substantial emergency reserve to assist you weather financial troubles. It is critical to ensure that appropriate funds are set aside for crises, as well as to examine your overall emergency strategy. Here are some important steps to take:

  • Create an emergency fund: Save three to six months’ worth of expenses to cover unforeseen expenses or job loss.
  • Invest in insurance: Think about whether you have enough coverage to safeguard you in the event of a temporary incapacity or other unanticipated situations.
  • Create powers of attorney: Ensure that you have both financial and medical powers of attorney in place. so that someone you trust can manage your affairs if you become unable to do so.

Look Ahead to Future Savings

Identify potential expenses that may arise in the future, such as:

  • Refinance your mortgage: Depending on current interest rates, refinancing your mortgage may result in a lower monthly payment or lower overall interest payments.
  • Reduce your food costs: by preparing meals in advance, purchasing in bulk, and taking advantage of special offers.
  • Rethink your car insurance: Compare auto insurance quotes to ensure you’re getting the best bargain and think about lowering your coverage levels to save money.
  • Curb your energy bill: Reduce your energy costs by turning off lights and electronics when not in use, using energy-efficient appliances and light bulbs, and adjusting your thermostat.
  • Use flexible spending or health savings accounts: If your employer provides access to these accounts, use them to pay for medical bills using pre-tax cash.
  • Cut the cable TV cord: To save money on monthly costs, consider switching to streaming services or a lower-cost cable bundle.
  • Divert your paycheck to savings: Consider contributing more to retirement accounts or setting up automatic transfers from your paycheck to an emergency savings account to increase your savings.

Your Annual Financial Planning Checklist to Build Alternative Income Streams

When planning for retirement, it is critical to consider all potential sources of income in addition to 401(k), pension plans, and Social Security benefits. Consider the following options:

  • Investing in rental property and becoming a landlord can provide a consistent source of income.
  • Real estate crowdfunding provides options for investors who do not wish to own a property entirely.
  • Part-time job: Consider supplementing your income with a flexible work-from-home career. The goal is to successfully manage your time.
  • Reverse mortgage: If you’re old enough and own your house, you might be able to use a reverse mortgage if money is tight.
  • Dividend stocks: Investing in dividend stocks can provide a consistent stream of income.
  • Consider starting a side hustle.

Start Using or Update Your Apps

Utilize personal finance apps to help you manage your finances. These apps can help you track your expenses, monitor your investments, and develop a budget. Update your apps regularly to ensure that you have the latest features and security updates.


What is financial checklist?

A financial checklist is a list of tasks or items that need to be completed or considered to manage your finances effectively.

What Is a Financial Plan?

A financial plan is a comprehensive strategy that outlines your financial goals and provides a roadmap to achieve them. It includes a budget, investment strategy, retirement plan, insurance coverage, and tax planning. The purpose of a financial plan is to help you achieve financial security and peace of mind by ensuring that you are on track to meet your financial goals.

Why Do I Need a Financial Plan Checklist?

A financial plan checklist is an essential tool that can help you stay organized and focused on your financial goals. It ensures that you don’t overlook any critical steps in creating a comprehensive financial plan. By following a financial plan checklist, you can achieve financial security and peace of mind, knowing that you are on track to meet your financial goals.

Do I Need Professional Help to Do My Checklist?

While you can create a financial plan checklist on your own, it may be helpful to work with a financial professional to ensure that your plan is comprehensive and aligned with your financial goals. A financial professional can help you evaluate your current financial situation, identify your financial goals, and develop a plan to achieve them

What are the 7 steps of financial planning?

The 7 steps of financial planning are:
Setting financial goals
Creating a budget
Building an emergency fund
Paying off debt
Investing for the future
Reviewing and adjusting your plan
Protecting your assets with insurance

What are the 10 steps in financial planning?

Define goals: Dream big, then break them down.
Track income & expenses: Know where your money goes.
Build emergency fund: 3-6 months of living expenses.
Pay off high-interest debt: Tackle those credit cards!
Invest for retirement: Start early, even small amounts.
Protect yourself with insurance: Health, life, disability.
Diversify investments: Don’t put all your eggs in one basket.
Review & adjust regularly: Life changes, so should your plan.
Seek professional help (optional): A financial advisor can guide you.
Keep learning: Stay informed about financial trends and options.

The Bottom Line

An annual financial plan is an extremely crucial tool for sustaining financial peace of mind today and in the future. Best-case scenario: You’ve already completed all of the items on this punch list. If not, set aside some time on your calendar to do so.

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