Annual Finance Checkup: The Checklist for a Healthy Financial Year

Last year during an annual financial review, a friend of mine discovered that their estate plan was outdated. This error could cause significant legal complications for their children, and had they skipped out on their yearly check-in, they easily could have missed it. Fortunately, by catching and addressing it, they avoided unnecessary stress and ensured their wealth would transition smoothly.

It’s stories like these that remind us why an annual financial checkup is indispensable. For people of substantial net worth, the stakes are higher, and the rewards of clarity even greater. According to a 2023 UBS Wealth Management report, individuals who regularly evaluate their finances feel 35% more confident in their financial future than those who don’t. An annual financial checkup is more than just a task — it’s a pivotal moment to ensure your wealth serves your goals and secures your legacy.

Imagine walking into the new year with confidence, knowing every part of your financial life is aligned and optimized. Feels good, right? Today I’ll show you how to achieve that security every year.

1. Start with Your Financial Documents

70% of Americans do not have an updated estate plan, according to a 2024 Vanguard survey. Outdated documents can cause significant complications in moments when clarity and precision are critical.

‍Action Items:

• Review and Update Key Documents: Wills, trusts, and power of attorney documents should reflect your current wishes.
• Check Insurance Policies: Ensure that health, home, auto, and life insurance provide adequate coverage for your assets and risks.
• Revisit Budget and Cash Flow Statements: High-income earners often underestimate lifestyle creep — an annual review helps ensure spending aligns with long-term objectives.
• Use tools like Olomon to digitize and organize these documents for easy access and updates.

2. Assess Your Investments

Markets shift, and so should your strategy. Your investments should evolve with changing conditions and your personal goals. For example, after a volatile 2024 market, many investors found rebalancing critical to maintaining their financial plan.

Action Items:

• Review Performance: Benchmark your portfolio against your goals and market indices.
• Rebalance If Needed: Asset allocation that worked five years ago may not align with today’s risk tolerance.
• Consider Tax Implications: Optimize your returns by exploring tax-efficient investment vehicles and strategies like tax-loss harvesting.
• Meet with your financial advisor for a portfolio review — the cost of neglecting this step often outweighs the fee.

3. Track Your Net Worth

What’s your financial legacy? Your net worth isn’t just a number — it’s the story of your impact and aspirations. And it’s the single most powerful snapshot of your financial health.

Action Items:

• Update Assets and Liabilities: Include everything from cash and investments to real estate and loans.
• Identify Changes: Tracking year-over-year progress shows whether you’re moving closer to or further from your goals.
• Set New Goals: Leverage your updated balance sheet to make informed financial decisions for the year ahead.
• Get Help from Olomon: By offering live Personal Financial Statements, Olomon allows you to track and contextualize your wealth dynamically.

4. Review Your Estate Plan

A 2024 Fidelity study revealed that 65% of high-net-worth individuals underestimate estate tax implications, setting them up for steep surprises. With more thoughtful, consistent reviews, you can avoid this annual pitfall. A well-executed estate plan is the ultimate gift to your heirs.

Action Items:

• Update Beneficiaries: Ensure retirement accounts, insurance policies, and wills reflect your current relationships.
• Plan for the Future: Major life changes — marriage, divorce, or new dependents — necessitate updates.
• Minimize Estate Taxes: Work with your advisor to explore tax-advantaged structures that preserve more wealth for future generations.
• Schedule a semi-annual review with your estate attorney to stay ahead of potential issues.

5. Audit Your Debt

Debt is a tool — but it requires careful management to avoid diminishing your net worth. Even small adjustments, like an extra $500 per month toward your mortgage, can yield substantial long-term savings. For borrowers with mortgages above $500,000, refinancing in 2024 saved an average of $8,300 annually.

Action Items:

• Evaluate Outstanding Debts: From mortgages to business loans, assess whether terms still serve your goals.
• Prioritize Repayment: High-interest debts, especially credit cards, should take precedence.
• Consider Refinancing: Locking in lower interest rates can save significant money over time.

6. Plan for Taxes

Every dollar saved on taxes is a dollar that works for your goals and your family’s future. Taxes are one of the most significant expenses for high-net-worth individuals. And strategic planning can save tens of thousands.

Action Items:

• Review Tax Documents: W-2s, 1099s, and other forms must be ready and accurate.
• Maximize Deductions: Explore retirement contributions, charitable donations, and other deductions.
• Check Withholdings: Adjustments now prevent surprises come tax season.
• Simplify with Olomon: With entity management tools, Olomon streamlines the complexities of tax preparation and strategic planning.

7. Set Financial Goals for the Year

Your wealth should work as hard as you do. Well-defined goals offer direction and purpose, keeping your wealth moving in the right direction.

Action Items:

• Set Short-Term Goals: Examples include saving for luxury travel or a special family event.
• Set Long-Term Goals: Focus on retirement, philanthropic endeavors, or building a legacy.
• Track Progress: Regular check-ins ensure you remain aligned with your vision.

Take Charge of Your Financial Health

A robust financial checkup isn’t just a good idea — it’s a necessity for those who want to secure their legacy and maximize their impact. The time invested in a thorough review pays dividends in clarity, confidence, and opportunity.

Start your financial year strong — dedicate time to your annual checkup today with Olomon and set the course for your wealth to grow and thrive.