How to Perform a Semi-Annual Financial Review

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How to Perform a Semi-Annual Financial Review

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When I was a financial planner, I performed semi-annual financial reviews with my clients. "Do we need another review already?" they would often say. "Nothing's really changed."

Although things may feel the same, more changes than we think. And if we review finances regularly, it's not a long arduous process; it's empowering and easy.

Here's a guide for your own semi-annual financial reviews:

How Perform a Semi-Annual Financial ReviewAssets

On a piece of paper or spreadsheet, list all your assets. Here are some potential assets to record:

  • Bank/Savings Accounts
  • Investments - Stocks, Mutual Funds, Bonds
  • Real Estate (purchase price and market value)
  • Retirement Accounts
  • Company Pension Plans
  • Money Owed to You
  • Collectibles you Would/Could Sell (be reasonable with this estimate)

Liabilities

Record all your debts - credit cards, personal loans, consolidation loans, car loans, mortgages, etc. Include the following:

  • Type of Debt (ie: credit card, mortgage, etc)
  • Amount Owing
  • Interest Rate
  • Monthly Payment Amount

Income

What - and how much - are your income sources (before and after tax)? Don't forget small or irregular income-generating activities; it's all part of your cash flow.

Expenses

If you track your expenses for your budget, then this part of your financial review is already done. Be honest in recording your expenses; you have nothing to prove, and only yourself to harm if you "forget" little things (like erroneous small purchases) - they add up.

Insurance

Insurance is part of your financial plan, and an easy aspect to maintain over time. List all your insurance policies, such as:

  • Auto
  • Home/Renter's
  • Health
  • Life
  • Disability (including critical illness or long term care)

Record these details for each policy:

  • Insurance Benefit Amount
  • Terms of Policy (when and how it pays out)
  • Monthly Payment (premium)
  • Where the policy is kept

Goals

Now for the fun part: dream big! What do you want to do with your life? What's important? What gets you out of bed every day?

Create a list of (at least) three goals, and be specific. For example, if retirement is important, envision a day in the life, and when and where you plan to retire. For major purchases (ie: house, car, business), how much money do you need and when? What about education (for yourself or your kids), or even goals that aren't financial, like running a marathon? By specifying all your goals and dreams, you can start to engineer your finances - and lifestyle - to make them happen.

This is particularly powerful when done in conjunction with your spouse, since it clarifies and aligns your financial futures, and can lead to deep conversations.

Start With Your Last Review

Your first financial review will take a while, because gathering all this information can be labor-intensive. But once you have something on paper, semi-annual reviews are easy. Start with your last review, and simply record what's new or changed.

Don't Do It Alone

As a financial planner, I was instrumental in my clients' financial reviews. My training and experience helped them clarify matters, and I offered valuable third-party perspective. I also performed advanced procedures like assessing insurance risk (often saving them money by properly insuring), finding tax deductions, increasing cash flow, and helping set realistic goals - then structuring their finances to make it happen.

So even if your finances are basic, consider consulting a financial planner to help with your semi-annual financial reviews. We'll talk more about what to expect from your financial planner next month.

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Nora DunnNora Dunn

Nora Dunn is The Professional Hobo: a full-time traveler and freelance writer. She is a contributing writer under the CareOne Debt Relief Services Life Balance blog. Having sold her business and belongings to travel, she has been on the road since 2007. She travels in a financially sustainable manner, taking advantage of creative volunteering positions. As a former certified Financial Planner, she is financially responsible for her actions along the way. She believes there is a fine balance between planning for tomorrow, and living for today. Compensated Blogger for CareOne Debt Relief Services. You can follow Nora on Twitter @hobonora

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  • So, my savings goal has certainly changed; however, the remaining habits have stuck and should continue not only throughout the rest of the year, but for the rest of my life.

  • Contrary to popular belief, you don't need to be rich to warrant the services of a financial planner.

  • A better way: be aware of all your financial holdings at all institutions and monitor them on at least a weekly basis.  The market is currently too volatile to be unaware for six months.  You may not make any changes more than every six months (avoid knee-jerk reactions) but you need to be fully aware of your holdings and investments at all times.

  • @Doug - Yes, it's good to keep tabs on your investments if they're invested in a particularly volatile way. But many - if not most - people don't have the perspective required to monitor a volatile portfolio regularly and NOT give in to knee-jerk reactions. And highly-volatile investments should be limited in your asset allocation (10-15% or less for aggressive investors), and should be for long-term investments only; all the more reason to let your portfolio do its thing over the long term, if you're properly diversified.

    Part of the point of this post is also to focus on all aspects of your finances - not just your investments. A semi-annual review should also include insurance, debts, and budget info.

  • Thanks for assuming that everybody is married and this will be so much more fun if done with your spouse.

  • @Pia - Ha ha....Sorry if that stung. You'd be amazed at how many spouses don't plan their finances together - I was simply trying to encourage communication about finance. (PS I'm single and I enjoy doing my own semi-annual financial reviews solo, thankyouverymuch!) :-)

  • Your estate is everything you own at death. Estate planning is about organizing your affairs, deciding who gets what, and setting out your wishes clearly.

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