Year-End Money Review: Five Questions to Ask Before January

December 21, 2023 · Cedar Street Financial · Chillicothe, Ohio

The last week or two of December is a natural pause. Work often slows a little, school is out, and the new year is close enough to think about without rushing into it. That makes it a practical time for a short money review — not a full financial overhaul, and not a judgment on how the year went, but a calm look at where your household stands. Five questions can cover most of what matters, including the protection many families mean to review and then run out of year to reach.

Set aside an hour, gather pay information, statements, and any insurance policies, and work through the questions below. Write the answers down.

1. What Came In, and Did It Change?

Start with income. Did your household pay change this year through a new job, different hours, a raise, or a second income starting or ending? Income is the foundation most other decisions rest on, including how much your family depends on each earner. If one income now carries more of the household than it did last January, that is important context for your protection and savings decisions. Also note anything you already know is changing in early 2024, so January's budget reflects real life rather than last year's assumptions.

2. What Do We Owe, and Is the List Shorter or Longer?

Next, list your debts: mortgage, car loans, credit cards, student loans, and any other balances, along with the payment for each. You do not need to solve the list in December. The goal is simply to see it clearly in one place and notice the direction it moved this year. If your family needed to rely on each adult's income to keep up with those payments, that is useful information too, because debts do not disappear if an income does. Seeing the full list often helps families decide what coverage amount would actually be meaningful for the people left to manage those obligations.

3. Are Our Beneficiaries Still the Right People?

This is the question most often overlooked, and one of the easiest to address. Beneficiary designations on life insurance policies and many financial accounts decide who receives those funds, and they can become outdated after marriage, divorce, a birth, or a death in the family. Take a few minutes to confirm that the beneficiaries named on each policy are still who you intend, that names and contact details are current, and that any contingent, or backup, beneficiaries are listed the way you want. Keep copies with your other important documents, and let a trusted adult know where they are.

4. Does Our Coverage Still Match Our Life?

Now look at protection itself. What life insurance do you have, through work, on your own, or both? How much would it provide, and for how long? Then compare that picture with the life you are living now, not the life you had when the policy started. A growing family, a new home, or higher income can widen the gap between what a policy would provide and what your family would need for housing, bills, and daily life. A smaller household or a paid-down mortgage can change the picture in the other direction. Either way, knowing whether there is a gap — and roughly how large — turns a vague worry into a decision you can make thoughtfully in the new year.

5. What Is One Goal That Matters Most Next Year?

Finish forward-looking. Rather than a long list of resolutions, choose one financial goal that matters most for 2024: building a starter emergency fund, paying down a particular balance, or putting protection in place that the family has been meaning to arrange. One clear goal is easier to fund and follow than five competing ones. Write down the first small step and the month you will take it. For tax-related questions that come up during your review, such as how specific accounts or benefits are treated, general information is a starting point only — consult a tax professional about your own situation.

A year-end review is not about finding fault with 2023. It simply catches your paperwork up to your life. If your review raises questions about coverage, we are glad to talk them through in plain language as the new year begins.

Frequently Asked Questions

What documents should I gather for a year-end review?

Recent pay stubs, mortgage and loan statements, credit card balances, savings and retirement account summaries, and all life insurance policies, including any through an employer, cover most households. Having beneficiary information for each policy is especially helpful.

How long should a review like this take?

For many families, about an hour is enough to answer the five questions and write down next steps. If you find a larger issue, such as outdated beneficiaries or a coverage gap, you can schedule the follow-up work for January rather than trying to finish everything at once.

What if we find we have no coverage outside of work?

That is a common finding, and simply knowing it is progress. Employer coverage can be a useful foundation, but it may change if you leave the job. Learning about individual options in the new year can help you decide whether adding your own policy makes sense for your family.