5 Financial Things to Review Annually| North Loop Official Blog
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25 Nov 2020

5 Financial Things to Review Annually

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Introduction -

An annual financial planning review should always get done religiously no matter what the on-going economic situation or climate looks like. But in times of market turmoil, a financial planning review becomes even more valuable and significant. Checking your personal finance strategy regularly can also help you better understand its effects on your long-term personal finance goals.

It can ensure that you are saving and investing appropriately for those goals, which can range from retirement savings, purchase of a house, or your child’s education. Adopting a personal finance strategy and reviewing it in timely intervals can help you reconsider several financial decisions, reduce taxes on your investments, protect your income and even aid you in building a financial cushion or backup.

Once you become clear of your personal finance goals and use the right financial planning advice and personal money management tips, you can begin working on your goals in a better manner.

Also, you should bear in mind that even though personal finance topics can give you a general overview or guideline on how to manage money, creating your financial strategy as per your priorities is essential. You should also pay heed to expert-suggested financial tips, or money tips, to build a successful personal money management system.

Another point to note is that if ‘how to make my money work for me’ is one of the many questions in your mind, experts suggest that you give ample amount of time to not only creating a financial strategy but also reviewing it frequently. Personal finance is a pretty broad topic and to determine the right ways on how to manage money or to use money tips and financial tips effectively, constant reviewing and adjustments become necessary.

Here we are listing five questions that you should consider when doing a financial review. Along with other personal finance topics that you come across, this plays a significant role in the overall success of your personal finance strategy.

Five questions to ask when you do a financial review -

Is my investment strategy on track?

Your annual financial review should ideally involve revisiting all of your priorities and strategies for reaching them and making adjustments where required. You should also be checking your target asset mix to ensure that it continues to meet your risk tolerance, preferences and needs.

If you think that the market performance requires that your asset mix get rebalanced, you should do it during your annual financial planning review. Taking a look at specific investments and evaluating their current role in your portfolio is also crucial as it can help you understand whether your past investments continue to align with your current goals or not.

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Am I saving tax-efficiently?

Along with continuing to diversify your portfolio and assessing your investment performance and role, you should explore options to find lawful ways to reduce or efficiently manage the taxes on your investments. Even though taxes should never become the sole driver of your strategy, tax-efficient investments can help you improve your returns.

After adequate and strategic financial planning, you can focus on accounts that offer tax advantages and learn how to use them to your advantage. Since market returns or tax laws cannot get changed or controlled, this gets considered as a suitable option to bring down your taxes.

Am I protecting my income?

Your annual review should also include a check of your total insurance needs. It is wise to evaluate your family’s insurance needs annually and ensure that you have the right amount and type of insurance to provide enough coverage for unprecedented financial emergencies or unforeseen circumstances.

Am I preserving my assets?

You can also use your annual review to ensure that you have a well-thought-of estate plan that considers several factors such as marriage, divorce, longevity and health. Your estate plan should reflect your family status and financial situation and make the best use of the latest laws. Also, letting key individuals know about this plan or relevant documents and information is a pivotal part of a complete estate plan.

How does my financial plan affect my family?

Your financial plan does not usually revolve just around you. It takes into account strategies for financial assistance to several people you get deeply connected with like your parents, children or even grandchildren. Your annual financial planning review should consider these things.

If done correctly, it can help you prioritize financial decisions that you need to make to support your family’s goals across the generations. It can also help you sort vital matters with your family related to topics like health care decisions, college savings, inheritance, caregiving responsibilities etc.

Conclusion -

We hope this article helped you understand that along with thinking about ‘how to make my money work for me’, there are a variety of aspects of financial planning that you should consider and the steps you should take to review them annually.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.