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Financial Planning Checklist: Get Set For 2023

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Updated September 12, 2022

Duke Cunningham CFP®, Vice President Business Development

Just like physical health, financial wellness requires routine attention.

Each year, you should review your assets and liabilities to accurately understand your current financial picture. This will help you define realistic and appropriate goals that span short, intermediate and long-term time frames. These goals will guide how you create or adjust your budget to support your financial success.

While a financial plan can be made on your own, research shows that working with a financial planner has delivered higher success rates than if you go it alone—especially when working toward long-term goals like retirement. Here’s a checklist to help you get started assessing where you stand today, so you can get to where you want to be tomorrow.

1. Review your assets and liabilities

Before you can do anything with your finances, you have to know exactly what you’re working with. When reviewing your assets and liabilities, you should gather statements from your bank accounts, retirement or investment accounts and list valuables that you own—like a vehicle or home.

Then, you’ll need to gather statements for all of your liabilities, like student loans or credit card balances. You should also list out every expense you are responsible for each month. For example, your expected food bill, utilities or rent payment.

2. Set Goals

When you have your finances all laid out, you can start to make short, intermediate and long-term goals. Here are some examples:

Short-term goals—in the the next one to three years I want to:

  • Pay off credit card debt
  • Build an emergency fund
  • Purchase life insurance

Intermediate-term goals—in the next four to ten years I want to:

  • Save for a down payment for a home
  • Pay off student loans
  • Save for a new vehicle

Long-term goals—in the next 10 to 20-plus years I want to:

  • Save for my child’s college education
  • Pay off my mortgage
  • Retire

3. Create and maintain a budget

Living on a budget is essential. Your budget is a tool that helps you make financial progress toward your goals. Using the information you collected from step one makes setting up your budget a breeze. You can create your own spreadsheet or you can use a budgeting app to help you.

Knowing which goals to prioritize is important, too, when setting up your budget. Paying off debt is a priority, as is building an emergency fund and investing 10 to 15 percent of your income in retirement accounts. Consider how these goals are being met or worked toward each month.

4. Tax planning

Tax season comes right after the New Year. Make sure you know what documents you’ll need to file your taxes, and talk with a tax professional if there are any tax benefits you are eligible for. Also ask if you should expect to pay any capital gains tax or if you will be on the hook for any tax liability.

If you expect a tax refund, make a plan for how it can benefit your financial life. How can that help you pay off debt? Save for a new car? If you are debt-free and have a fully funded emergency fund, consider depositing it directly into an investment account.

5. Evaluate your insurance coverage

Something you should consider when thinking about your family finances is a plan for emergency situations.

Life insurance and/or disability insurance should be part of your financial plan—especially if your family depends on your income to cover monthly expenses. Many life and disability insurance options are affordable and offer you and your family peace of mind.

Other forms of insurance, such as health, homeowners and auto insurance should be reviewed either during open enrollment, or annually when your premiums are due. Looking into ways to bundle insurance may also save you money if you haven’t explored those options already.

One form of insurance that might be helpful is an annuity product. If you are nearing retirement and think you’ll need additional income sources, look into purchasing an annuity.

6. Review your retirement and investment accounts

It is never too early to start saving for retirement. You should be putting 10 to 15 percent of your income into your employer’s 401(k) plan if they offer one, or you should put an equivalent amount in your personal traditional or Roth IRA.

If you have a financial advisor who is managing investments for you, review your asset allocation to make sure that your portfolio is balanced in a way that reflects your risk tolerance and retirement horizon.

7. Refinance or create a mortgage strategy

If you own your own home, consider easy ways you can shorten the amount of time you will carry this long-term debt.

Sometimes refinancing your mortgage is a good option, depending on current interest rates and market conditions. Refinancing a 30-year mortgage to a 15-year mortgage will save you an enormous amount of money paid to interest.

If that isn’t a good option for your financial life right now, there are other ways to save. For example, many lenders offer a reduced interest rate if you set your mortgage to auto-pay. You can also pay half your mortgage payment every two weeks, which at first doesn’t seem much different than just paying once a month, but this actually means that you’ll end up paying one additional mortgage payment each year. Any extra amount of money you can pay toward your mortgage is beneficial to reducing this long-term debt.

8. Create an estate plan

Everyone should have an estate plan. If you don’t have a will, trust or both, make a goal for completing an estate plan as soon as is realistically possible. In some states, you can even create a will online.

We’re here to help

Creating, maintaining, and monitoring your progress in your financial plan is a serious and important time commitment. Our professionals at Trust Point are here to help. We are a fiduciary that is committed to your financial success. Click here to get started.

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Duke Cunningham CFP®, Vice President Business Development