You’re Not Failing—You’re Just Missing the Map
Ever feel like your money is leaking out faster than it’s coming in—even though you’re trying your best? You’re not alone. Most families aren’t financially struggling because they’re careless. They’re struggling because they lack one critical habit: a financial checkup.
An annual financial checkup is like a wellness exam—but for your wallet. It helps you identify what’s working, what’s not, and where you can do better. More importantly, it sets your family up for long-term success and peace of mind.
And you don’t need a finance degree or CPA to do it. Just a few hours, once a year, can make a world of difference.
Here are the six steps to conducting your annual financial checkup—and why it could be the smartest financial habit your family starts this year.
1. Review Your Net Worth: Your Financial Health Snapshot
Why It Matters
Your net worth is the single best way to understand your overall financial health. It tells you, in black and white, whether you’re building wealth or accumulating debt.
A negative net worth doesn’t mean you’re failing—it just means you have a starting point. From there, every step forward becomes measurable.
How to Do It
How to calculate net worth:
- Add up everything you own: cash, retirement accounts, investments, real estate, and personal assets.
- Subtract what you owe: mortgages, car loans, student loans, credit cards, and other liabilities.
This gives you your current net worth. Repeat this process every year and track your progress.
You can also use free financial tools like Empower (formerly Personal Capital) or Mint by Intuit to automate this process.
2. Audit Your Budget: Align Spending With Priorities
Why It Matters
Without a clear budget, it’s easy to fall into lifestyle creep—where your expenses slowly rise as your income grows. Reviewing your budget ensures that your spending reflects your family’s values and long-term goals.
How to Create a Family Budget
Start by reviewing 3–6 months of bank and credit card statements. Look for:
- Unused subscriptions
- Overspending categories (e.g., dining out, entertainment)
- Inconsistent savings contributions
Consider adopting a budgeting method like:
- Zero-based budgeting (every dollar has a job)
- Envelope budgeting (a tactile approach to spending categories)
Free apps like You Need a Budget (YNAB), Goodbudget, or EveryDollar can help simplify the process.
3. Check Your Emergency Fund: Prepare for the Unexpected
Why It Matters
An emergency fund is your buffer between a temporary setback and a long-term crisis. According to the Federal Reserve’s 2023 Economic Well-Being Report, 37% of adults say they would struggle to cover a $400 emergency.
How to Do It
Your goal should be to save 3–6 months of essential expenses. If that feels daunting, start with a smaller milestone—$500 to $1,000 is a solid beginning.
Keep the fund in a separate high-yield savings account so it’s accessible but not easily spent.
Top options include:
Automate a small monthly transfer. Even $25 adds up over time.
4. Evaluate Your Debt and Credit: Take Back Control
Why It Matters
Debt can silently drain your future. And your credit score determines how much you pay for future loans, whether you can rent an apartment, and even your job eligibility in some industries.
According to Experian, the average FICO score in the U.S. is 717 as of 2023. Knowing your own score—and your debt load—is essential.
How to Do It
List every debt you owe:
- Balance
- Interest rate
- Monthly payment
Then choose a debt repayment strategy:
- Debt snowball: Pay smallest balances first
- Debt avalanche: Pay highest interest first
You can also consider debt consolidation if it helps lower your overall interest rate.
Pull your free credit report annually from AnnualCreditReport.com. Review for errors and dispute any inaccuracies.
Free credit monitoring tools include:
5. Review Insurance and Estate Plans: Protect What You’ve Built
Why It Matters
Most people don’t want to think about insurance or wills—until it’s too late. But having the right life insurance and estate plan is the ultimate act of love and responsibility.
How to Do It
Start with these questions:
- Do you have term life insurance that would replace your income if something happened to you?
- Are your auto and home insurance policies adequate for current replacement costs?
- Do you have a healthcare directive or power of attorney in place?
- Have you written a simple will to dictate what happens to your assets and children?
If the answer is no to any of these, make it your goal this year to take action.
Helpful platforms include:
- Policygenius for comparing life insurance
- Trust & Will and FreeWill for estate planning
6. Set One Big Financial Goal for the Year
Why It Matters
When everything feels urgent, nothing gets done. That’s why setting just one clear, measurable financial goal can transform your year.
Ideas to Consider
- Pay off $5,000 in credit card debt
- Save $10,000 for a down payment
- Max out a Roth IRA
- Fund a child’s 529 college savings plan
Then break that goal into monthly milestones. Automate the contributions. Track your progress on your fridge, a whiteboard, or a goal-tracking app.
When your family is united around a shared financial mission, money becomes a tool—not a source of tension.
BONUS: Make It a Family Tradition
Don’t go it alone. Schedule your financial checkup with your spouse. Loop in your kids using age-appropriate language. Celebrate progress together.
Kids learn more from what we do than what we say. Let them see you taking ownership and building something that lasts.
You could even make it an annual family event—mark it on the calendar, have pancakes, and do your review. (Seriously. Pancakes make everything better.)
Annual Financial Checkup Checklist
Here’s your quick reference list to use every year:
✅ Review your net worth
✅ Audit your budget
✅ Check your emergency fund
✅ Evaluate debt and credit
✅ Review insurance and estate plans
✅ Set one big financial goal
Final Word: Don’t Wait for a Crisis
You don’t need to be rich to do a financial checkup. You just need to be intentional.
This isn’t about perfection—it’s about progress.
Block off a Saturday, grab your spouse, open your laptop, and walk through the steps. You’ll leave with clarity, confidence, and a plan to move forward.
“Small hinges swing big doors.”
Start swinging the door toward peace, control, and financial freedom—one checkup at a time.
