Giving Yourself an End-of-Year Financial Review

Giving yourself an end-of-year financial review is a wonderful way to check on the progress you’ve made toward your goals, highlight areas needing improvement, and update your accounts, funds, and investments. Here’s all you need to know about this important end-of-year ritual.

Step 1: Review all your debts and create a payoff plan

Take a few minutes to list all your debts and their interest rates. Have you made any real progress toward paying them off this year? Or have you stuck with minimal payments each month, leaving the actual balance to pile up since you’re mostly just paying interest?

If your debt needs some help, you have two primary options for how to proceed:

• The avalanche method: Focus on paying off the debt with the highest interest rate first, and then continue to the debt with the second-highest interest rate. Move through the list until you’ve paid off all your debts.
• The snowball method: Work your way through your debts, starting with the lowest-balance debt. Then, once it’s paid off, apply the payment that was previously committed to that debt to your new lowest debt. Repeat through the rest until all debts are paid off.

For both methods, be sure to pay the minimum balance on all your other debts each month. Try to boost your income and/or trim your monthly spending for extra cash and use it toward the first debt you are paying off completely.

Step 2: Automate your savings

Review your savings from 2022. Have you reached your goals? Have you forgotten to put money into savings each month?

Going forward, make it easy by automating your savings. You can set this up through your online and/or mobile banking with us. This way, you’ll never forget to put money into savings again.

Step 3: Review the progress you have (or haven’t) made on financial goals

Have you made measurable progress toward your financial goals in 2022?

Take a few minutes to review your past goals, taking note of your progress and determining how you can move toward achieving them.

Step 4: Review your retirement account(s) and investments

As you work through this crucial step, be sure to review the following variables:

• Your employer’s matching contributions. Are you taking advantage of this free money, or leaving some of it on the table?
• Management fees and expense ratios for your investments
• Your stock/bond ratio and investing style. You may want to take more risks in 2023 or decide to play it safer this year.
• Your portfolio’s balance. Does it need adjusting?

Step 5: Create an ICE Binder

Create an In-Case-of-Emergency (ICE) Binder to hold all your important documents in one place in case the unthinkable happens. Because of the sensitive nature of the information it holds, be sure to keep this in a safe place where it will not fall into the hands of identity thieves. Abri Credit Union offers safe deposit boxes at our Romeoville branch where you can keep your important documents.

Include the following in your binder:

• Medical information
• Account information
• Child care and pet care details
• Online accounts and passwords
• Insurance policy documentation and details
• Investment accounts and details
• A copy of your life insurance policy
• A copy of your living will
• A copy of your last will and testament

Step 6: Set new financial goals for 2023
As you finish reviewing your financial progress from the past year, look forward to accomplishing greater financial goals in the coming year.

A great way to turn dreams into reality is to set goals that are SMART:

Specific

Measurable

Attainable

Realistic

Timely

Here are some goals you may want to set for the coming year:

• Create a monthly budget before January. Be sure to include all expense categories. Review on the first of each month and tweak as necessary.
• Review the week’s spending each Friday night.
• Pay off your largest credit card bill by 2023.
• Start a vacation fund in February.
• Cut out two subscriptions you don’t really use by mid-year.

If you need help with your financial review, Abri Credit Union offers Financial Counseling. Our staff members are happy to help get you on the right track. Visit abricu.com to make an appointment or click here and under “other financial needs” select “financial counseling” or you can give us a call at 815-267-7700. Wishing you a financially healthy New Year!