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As summer ends and a new school year begins, parents face the challenge of back-to-school expenses....
As the year draws to a close, it's an opportune time to conduct a thorough review of your financial health. Assessing your financial situation helps you understand your progress, identify areas for improvement, and set informed goals for the coming year. Here’s a guide to conducting a year-end financial review.
Review your past year's income and expenses to assess financial management. Compare actual spending to budgeted amounts in categories like housing, groceries, entertainment, and transportation. Identify discrepancies to adjust the budget for better alignment with spending habits and financial goals.
Check emergency fund, RRSPs, TFSAs, and savings; aim for 3-6 months' expenses in emergency fund. Review and increase contributions to retirement accounts like RRSPs and TFSAs for maximum advantage.
Review your debts, including credit cards, loans, and mortgages. Calculate your debt-to-income ratio. Develop a plan to pay off high-interest debts first. Explore debt consolidation or refinancing for lower rates and payments.
Review your investment portfolio annually to align with risk tolerance and goals. Assess past performance, rebalance by adjusting asset allocation, and seek advice from a financial advisor for guidance on adjustments or new opportunities.
Your credit report is a crucial aspect of your financial health.
Check your credit reports from Equifax and TransUnion for errors. Ensure accuracy, dispute any inaccuracies to avoid negative credit score impacts, which are crucial for favorable loan terms.
Review insurance policies for health, auto, home, and life to ensure they meet your needs. Check coverage limits and deductibles, updating policies if circumstances change. Adequate insurance is crucial for financial protection.
Plan for year-end taxes by reviewing, adjusting withholdings, contributing to tax-advantaged accounts, tracking deductible expenses, and charitable donations. Set financial goals for the upcoming year focusing on savings, debt reduction, and investing. Conduct a year-end financial review covering budget, savings, debt, investments, credit, insurance, and taxes for a strong start to the new year.
