As the new year unfolds, it’s the perfect time to evaluate your finances and set the stage for a prosperous year ahead. Here’s a checklist to guide you in making strategic adjustments:
Emergency fund management — Begin the year by assessing your emergency savings. Aim to build or replenish a fund that covers three to six months of expenses, ensuring you have quick access to cash for unexpected costs like medical bills or car repairs. This can help you avoid high-interest debt and protect long-term savings.
Insurance policy review — Life events such as buying a home or having a child may require insurance adjustments. Consider increasing life and disability insurance coverage to match your current needs. Update beneficiaries on all policies and accounts to protect your assets for loved ones.
Health care evaluation — With open enrollment for health plans having just concluded, review your current coverage and consider new options for you and your family. If you have a Health Savings Account (HSA), consider maximizing contributions to benefit from triple tax advantages — money goes in tax-free, grows tax-free and comes out tax-free for qualified health care expenses. Those 55 or older can contribute an additional $1,000. For Flexible Spending Accounts (FSA), check spending deadlines as you may only carry over $660 into the next year.
Investment strategy assessment — Regular evaluation of your investment portfolio ensures alignment with your risk tolerance and goals. Adjust asset allocation to support long-term objectives. Tax-loss harvesting can offset taxable income – consider selling investments at a loss or realizing gains wisely, with guidance from your advisor.
Retirement contributions — Consider enhancing retirement savings by increasing contributions to IRAs, 401(k)s, or Roth accounts. Incrementally boosting contributions each year maximizes tax benefits and growth potential.
Budget Review — Examine cash flow and spending habits from the past year. Update your budget for 2026, focusing on priorities that match your financial goals. Anticipate major expenses like weddings or home purchases and begin saving accordingly.
Debt and Credit Management — Review interest rates on existing debts. Prioritize paying high-interest loans and consider refinancing options. Regularly check your credit score and obtain your free annual credit report to ensure credit health.
This checklist is a starting point, and we encourage people to talk through this list with their financial advisor as they provide more personalized guidance tailored to your needs and goals.
Tyler Kargl is a wealth management advisor for Northwestern Mutual’s Bettendorf office, 4323 Ontario Drive. He can be reached at [email protected].
