How To Do A Year End Financial Review

A year-end financial review can be a great tool to help you achieve your financial goals. It provides you with the opportunity to review your spending, investment performance, and goal progress for the past year. Understanding what happened with your finances in the past year can help you create better goals for the next one. Here are the three things you should review at the end of each year.

Check on Financial Goal Progress

Take some time at the end of the year to check in with your financial goals. Ask yourself if you are on track to achieve your goals or if your goal priorities have changed. If you reached a savings or investing goal over the past year, take some time to celebrate your hard work before setting a new goal for the next year. If setting financial goals makes you uncomfortable, you can always search for professional help from financial planning services Somerville NJ.

Review Asset Allocation Balance

Once a year you should check on your current investment asset allocation to determine if rebalancing is necessary. As the market goes through its ups and downs your portfolio’s allocation can become unbalanced. Take the time at the end of the year to sell some of your best-performing assets to purchase that might be undervalued to return your portfolio to its desired allocation percentages.

Add Automation

It’s much easier to achieve your financial goals over the long term if you don’t have to take action towards them more than once. If you got a raise at the end of the year, it’s a great opportunity to automatically put a percentage of that towards your savings goals. Many banks and financial institutions offer automatic transfers and routine investment schedules. In just a few minutes you can set up a system of success that will benefit you all year long.

Whether you manage finances for just you or for your entire family, a year-end financial review is critical for understanding your personal situation.