We can't believe that 2021 has passed. How's your 2021? Is it okay to get
here? Have financial goals been met? Or do you step back a little, to
finally move forward again in 2022? Are you ready to review your year-end
financial plan? Do you have to do a year-end financial plan review?
Well, actually there is nothing that requires it. However, if we do so, we
can take advantage of the results of the review to make better financial
planning for next year. We will also know how close we are to our financial
goals.
Well, even though in 2022 there is also no certainty what our economy will
look like, but shouldn't we be prepared for the worst and hope for the best
at the same time? At least, we definitely want 2022 to be a better year.
So, what do we need to check in a year-end financial plan review? Here he
is.
Check These 5 Things When Reviewing Year-End Financial Plans
1. Income vs Expenditures
The first thing to check at the end of 2021 is the condition of your income
versus expenses for one year.
- Is your cash flow smooth?
- Are you still living paycheck to paycheck? Alias salary is still just a ride at the ATM? How many sources of income do you have?
- What is your debt ratio? What is your saving ratio?
- What is your liquidity ratio
- Check your financial records, and see, which part do you feel is "lacking"?
If you are married, invite your partner to observe together. If there is
something that is not as expected, look for the best solution so that the
condition can be improved next year. Especially about income.
If in 2021, you still depend on one type of income door, try to look for
other additional opportunities.
There are many alternatives that can be
tried, if they do not interfere with the main work. For example freelancing
or selling products.
2. Investment performance
The year-end financial plan review also includes checking investment
performance. So, take a look, how is the current condition!
- Have you invested in any instruments?
- How is it growing?
- Is it already positive, or is it still relatively negative when compared to conditions before the pandemic? Which instrument is underperforming?
- Is it possible to optimize it again, or should it be reviewed specifically and in more depth, because it is already helpless? Is it still within the expected timeframe? Or is there a financial goal that will soon have to be achieved? For example, for children's education funds to be paid next year, are the instruments safe? Or need to be moved?
Recalculate everything, match it with a plan that has been made previously.
If necessary, consider whether it is necessary to rebalance, so that the
composition is more balanced next year.
3. Assets vs Liabilities
The comparison of assets to liabilities, or liabilities, will determine how
much net worth, or net worth, we have. If we have obtained a comparison, we
can also compare it with last year's conditions; is it growing, or is it
shrinking?
If it develops, then you can continue what you have been doing, with
adjustments to current conditions. If it shrinks, you need to find out, what
causes it and then find a solution. Check the current debt ratio. I hope you
stay healthy, which is under 30% of your regular income.
4. Protection
The next thing you should check in a year-end financial plan review is the
need for protection. Check:
- Does the insurance you have suit your needs?
- Have you submitted a claim, and what was the process?
- Does your life insurance coverage meet your needs?
- Does it need to be added? Is there insurance that is due?
- Does it need to be extended again?
5. Financial goals
So, it's here, you also need to re-check the achievement of your financial
goals in this review of the financial plan at the end of 2021. What
financial goals do you have, and how do you stand now?
For example, you have
a financial goal for a down payment on a house, which in 2021 should have
been fulfilled by 70%.
So, how? Is it 70% already, or not? If not, then you need to find out where
the problem is, and then create a new plan to address the existing problem.
Well, those are some things that you need to check and pay attention to in
the process of reviewing the financial plan at the end of 2021.
Well, I hope
everything is fine. You can use the results of your review later to make
financial plans and determine priorities for achievements in 2022. Of
course, you want your condition to be better in 2022, right? Yes, sure!
