During the year, it’s likely that you’ll go to the doctor for your yearly physical. Just as you care about your physical health, you should care about your financial health. That is why you should consider doing an annual financial review. When it comes to conducting an annual review, it’s all about progress and reviewing your financial history of the past twelve months. Additionally, a review can help you determine how well you are managing your money and make any necessary adjustments to your financial plans.

If you have never heard of an annual review or are considering conducting one, Brink’s Money is here to help and outline everything you need to know about annual financial reviews.

What is an Annual Financial Review?

For starters, what exactly is an annual financial review? This review gives you great insight into not only your current financial situation but also other important factors such as your retirement funds, assets, and your progress to any financial goals you might be working towards. A financial review goes extremely in depth to looking at your assets and liabilities to see if you’re on the right track. One of the most important benefits to conducting an annual review is that it can help you identify any changes you need to make in your financial plans such as ensuring that you’re saving enough money for retirement or what areas you need to focus on more.

When you do decide that you would like to conduct an annual review, the first step to consider is enlisting the help of a trusted financial advisor. Working with a financial advisor is ideal since they’ll be able to offer financial advice on topics that you might not be familiar with or have not considered before. A financial advisor could also be of great help for guiding you on how to save more money and make the most of any digital tools may be available to you.

Preparing for Your Review

Before you go into your annual review meeting, it is important to look over any important documents and review your current financial plan so you’re familiar with your situation. By glancing at your financial documents, you can determine whether the same priorities you once had still apply or if you have new goals you would like to achieve or make changes to current goals. During this time, you can also come up with any questions you would want to ask your financial advisor. These questions can help you get clarity as to where you currently stand financially or address any concerns you may have about reaching your goals. This step of preparing yourself for your financial review is all about familiarizing yourself with your finances and being in better shape for when it’s time to meet with your financial advisor.

Important Documents

When we talked about preparing for your annual financial review, we mentioned the importance of looking over any important documents. That’s why we wanted to highlight just what these documents are so you know exactly what to look for.

1. Statements for any bank accounts

2. A benefits statement

3. IRS letter documents

4. Insurance policy information

5. A list of your assets

6. A list of all your debts

7. Your credit report and score

Having these documents in hand or accessible to you for review will help you get a better understanding about your financial situation and prepare you for your meeting.

Evaluating Your Situation

When you are evaluating your financial situation, there are a few things you need to consider. You should first consider your goals and whether they have generally stayed the same or you want to alter them. As a part of your goals, this might be the time that you give yourself a new goal for the upcoming year or next few months whether you want to make a greater contribution to your retirement fund or allocating more money to your emergency fund.

Next, you should consider if after this annual review you are expecting any type of change to your life or situation. A change could mean a new job or you’re possibly looking to move to another home. These changes should be taken into consideration as you develop a budget or need to make changes to your spending habits. Additionally, this is also the ideal time to look at your debt and how well you are managing it. Lastly, reviewing your credit score is also valuable in case it’s not where you want it to be and you can discuss it with your financial advisor and figure out a plan to help you improve your credit.

What to Look For in Your Review

Once you do meet with your financial advisor and carefully examine your finances, there are a few takeaways you should have or topics you should address. First and foremost, it’s essential that you discuss what is important to you and this means looking at your financial plan and consider what has happened in the past year and if you have taken on new responsibilities that should be considered from now on. Determining what is most important to you will allow you and your financial advisor to develop more personalized goals and cater to your needs in a new plan.

Something else to take into account is discussing your comfort with risk. If you are looking into making investments, it is important to talk about risk tolerance and how this might affect your long term financial goals. During your annual review, you can also examine your investments in your accounts and your financial advisor can advise you on how to continue growing those accounts and make the most of your investments.

Sitting down with a trusted advisor is extremely valuable for you whether you decide to do this at the end of the year or to start the new year. Conducting an annual financial review will allow you to obtain a better understanding of your financial situation and if you’re on the right track to achieving your financial goals. Additionally, this review will advise you on how to go about making investment decisions and plan for your retirement later down the road.

If you own a business, our BBE accounts are the right tool you need to start expense management today, which can help you in your annual financial reviews down the road. Let Brink’s Money help you today.