Plan Your Financial Year Now

If you are like many people, you have a New Year’s Resolution to do better with money this year. Some will be looking to get out of debt. Some will be looking to be looking to repair their credit score. Whatever your goals are for this year, you have a better chance if you schedule some financial check-ups now.

I have set up quite a few appointments in Google Calendar to keep myself honest. I like to use the recurring feature so that I only have to create these “appointments” once. I even invite my wife so that we can have a financial summit for a few of them. Here are just a few of the financial appointments that I have:

Credit Checks – You can get a free credit report from each of the 3 major credit bureaus once a year from Annual Credit Report. I like to stagger them and get one every 4 months. This way if there’s a big error that gets on all of them, you can correct it before rather than have it stuck on there all year.
Annual Credit Report won’t give you a free credit score, but you can get one from Credit Karma. (You may want to read my Credit Karma review.)
Net Worth Checks – It’s always valuable to schedule some net worth calculations to make sure you are moving in the right direction. How many is up to you and may even depend on your financial situation. When my net worth was very small, I used to do them every month. Now as I am married, and our real estate and stock holdings have grown, we tend to do it 4-6 times a year.
Why do it less often now? Our real estate holdings are fairly illiquid, we aren’t going to sell them and their fair market value greatly depends on factors we can’t control. Our stock holdings are fairly diversified, but again, we aren’t going to sell them and their fair market value greatly depends on factors we can’t control. With this being a big part of our net worth, our actionable items are minimal. Also, I don’t think my wife looks forward to our financial summits with the same zeal I do. That said, it is still worth it to look and see things moving in the right direction.

While doing a net worth check, consider rebalancing your portfolio. You might as well since you are looking at the account, right?

Cash in Reward Card Points – This month’s Kiplinger’s makes the point that many reward cards are requiring more points for rewards. The recommendation is to cash in rewards sooner rather than later. Money now is always a good thing, but it’s even better when they deflating the value on you. My recommendation is to set a calendar entry to give it a look every couple of months, but this is entirely dependent on how you earn rewards.
Your Necessary Expenses – It’s been far too long since I’ve reviewed my necessary expenses.. over two years. I should be doing this quarterly. For those who are new to this (or need a reminder), your necessary expenses are basic costs of living like housing, food, utilities, transportation (as that is often required to earn an income), insurance (disaster protection is important), etc. The idea is to keep these costs as low as possible, so if the poop hits the fan, your emergency fund can give you many months (or even years) of freedom.