It can be difficult to stay on top of your finances on a daily basis, but you should find time once each year to perform a financial checkup. The state of your financial health can impact your current and future security, and it should not be taken lightly. The purpose of a financial checkup is to ensure that your finances are healthy and that you are still moving on the path that you previously established when you last analyzed your goals. Many people set up automatic bill payments, auto transfers to their savings and investment accounts and more to take the time and stress out of financial management. Because of this and various other factors, you may not be in touch with your financial health. By following a few steps, you can ensure that you are on the right track.

Update Your Goals

You may have already created a financial plan that helps you to achieve goals you have for the future. These goals may be to send the kids to college, to renovate the house, to make new investments and more. However, goals can change over time, and you may now have slightly different plans in mind. Now is the perfect time to update your goals and to determine what the cost of those goals may be. You can then analyze those goals in comparison to your current account balances and savings efforts to determine if you are on track to meet your goals.

Check Your Emergency Savings Account Balance

An emergency savings account is one of the best financial resources you can have. It provides you with a convenient and reliable way to pay for unexpected expenses without having to turn to credit cards or other forms of debt. Over the course of the last year, you may have dipped into this account to pay for various expenses, such as car repair bills, home repairs, medical bills and more. Take time to determine if you currently have a healthy balance in your savings account. If not, it may be time to adjust your savings contributions each month until you reach your target balance.

Review Your Credit Report

Consumers are permitted to obtain a free copy of their credit report each year. You can easily visit each of the three bureaus to request your credit report. Check your credit score to ensure that it is healthy. Remember that your credit score will impact the cost of credit available to you, your insurance rates, your ability to rent a home and much more. It is also wise to review all of the information on your credit report. If you notice any errors, contact the bureaus and your creditors to correct the information.

Analyze Your Assets

Your assets include your home, your investment accounts and more. It is important to determine their current value and to evaluate how well they have performed for you in recent months. You may even consider creating a net worth calculation. Estimate your home’s equity by determining the current property value and subtracting all liens. Research your investment and retirement account balances. Ensure that these have grown at a sufficient rate to meet your goals. If not, you may need to re-allocate your money in different investments.

Review Your Life Insurance Policies

Life insurance is most commonly purchased to provide death benefits to loved ones, but whole life can also accrue cash value. Review your policies to determine when they will expire. Also, analyze the cash value, if any, and the death benefits. Ensure that your current policies still meet your needs. If not, make adjustments to your existing policies, or purchase new policies.

Your financial health is critical to your lifestyle as well as to your future. Each year, you can take these steps to ensure that you are on a great path to reaching your goals and to ensure that your financial health is strong.