How to Review Your Finances Quarterly

Set a Consistent Schedule

First, decide when you want to conduct the review, which should be at the end of every financial quarter. Mark it on your calendar: March 31, June 30, September 30, and December 31. These are the official end-of-quarter dates, and since these dates are on different days of the week each year, it’s a good idea to pick the nearest weekend to perform this task so that you don’t feel like you’re cutting it too close. The key is to create a sustainable rhythm that becomes a habit.

Gather and Organize Financial Documents

Next, gather all your financial records and paperwork. This includes bank statements, credit card statements, investment account summaries, loan documents, insurance policies, pay stubs, and any receipts or invoices for major purchases or expenses. You may choose to have one folder for each category and keep them updated throughout the quarter. The better organized your information is, the easier and quicker it will be to review it.

Assess Your Income Streams

Take a look at your sources of income. Consider the past quarter and compare how much you made to the previous quarter. Do you have multiple streams of income, such as a salary, side hustle, rental income, or dividends from investments? Evaluate the performance of each income source and consider whether any adjustments need to be made. Is a particular source of income declining? Are there opportunities to increase your earnings in a specific area? Make sure to track your progress and celebrate milestones to stay motivated and focused on your goals.

Track and Categorize Expenses

After assessing your income, it’s time to examine your expenses. Categorize them into different areas such as housing, utilities, groceries, transportation, entertainment, and any other relevant categories for your situation. Analyze where your money is going and whether it aligns with your financial goals. Are there any expenses that have unexpectedly increased or categories where you’ve overspent? Identifying areas of overspending can help you reallocate funds towards more meaningful financial objectives. Tracking your expenses on a quarterly basis also helps prevent lifestyle inflation from gradually creeping up as your income grows.

Reconcile Accounts and Check for Errors

Accuracy is crucial, so take the time to review your bank and credit card statements to ensure that all transactions are recorded correctly and that there are no errors or duplicate charges. This is also a good time to double-check for any subscriptions or recurring charges that you may no longer be using but are still being charged for. This helps you avoid overspending and potentially wasting money. Addressing errors and keeping a close eye on subscriptions also helps you maintain control of your finances and ensure your spending aligns with your priorities.

Review Debt and Credit Health

Debt management is an essential part of your financial review. Review your debts, including credit cards, loans, and mortgages. Note the balances, interest rates, and any progress made toward paying them down. Are you making consistent progress in reducing your debts, or are there any loans that you want to prioritize paying off? Additionally, take a look at your credit score and credit report to make sure that everything is accurate and that there are no errors that could potentially hurt your credit score. Consider a debt payoff strategy such as the snowball or avalanche method to stay on track.

Evaluate Savings and Emergency Funds

The next step is to review your savings. This includes emergency funds, retirement savings, short-term savings, and any other savings goals you may have. Have you been contributing to your emergency fund? Is it sufficient to cover unexpected expenses? Is it time to reassess your savings goals or increase contributions? Consider your overall savings rate and make adjustments as necessary to align with your long-term financial plans.

Examine Investment Performance

If you have investments, review their performance. This includes stocks, bonds, mutual funds, real estate, and other investment vehicles. Compare their performance to benchmarks and your personal financial goals. Is your investment portfolio on track to meet your financial objectives, or are there adjustments that need to be made? If your investment strategy includes regular contributions, consider whether you’re on track to meet your savings goals.

Revisit Financial Goals

Review and revisit your financial goals. This could be short-term, medium-term, and long-term financial goals. It’s essential to make sure that your current financial plan aligns with your goals and that you’re making progress towards achieving them. This step is about ensuring that your money is working towards your financial priorities and that your plan is relevant and current. Goals often shift with life changes, so make sure to account for changes in your life circumstances.

Review Insurance Coverage

Insurance is an important part of your financial life, so make sure to review your insurance coverage. This includes health insurance, life insurance, disability insurance, auto insurance, and homeowners or renters insurance. Review the coverage amounts, deductibles, and premiums. Are they adequate for your current needs? Have there been any life changes that require adjustments to your insurance coverage? Don’t forget to check with your human resources department if your health insurance is employer-sponsored to know if your contribution to the insurance plan changes on an annual basis.

Check Tax Withholding and Planning

Review your tax situation and ensure that you’re on track with your tax planning. This could include checking your tax withholding if you’re an employee, estimated tax payments if you’re a freelancer or small business owner, or investment gains that may be subject to taxes. Consider any deductions or tax credits that you may be eligible for, and ensure that you’re taking advantage of them. While it’s best to get annual help from a tax professional or accountant, it’s still important to do your part by reviewing your situation quarterly.

Reflect on Spending Habits and Financial Mindset

After reviewing your finances, take a few minutes to reflect on your relationship with money. Consider any emotional triggers that may have led to overspending, and whether your purchases have been bringing you joy or just temporary satisfaction. Journaling can be a helpful tool for tracking your progress, setbacks, and what you’ve learned. This helps you to stay mindful of your financial choices and reduce stress and anxiety around money.

Adjust and Create an Action Plan

Take action and develop a plan to address any issues or challenges that you’ve identified in the previous steps. This could include setting up automatic savings, paying off specific debts, increasing your investment contributions, or cutting back on unnecessary expenses. Create a realistic and actionable plan with deadlines and hold yourself accountable to it by tracking your progress on a monthly basis. Remember that small, consistent changes can make a big difference over time.

Use Technology to Simplify the Process

Financial technology, like budgeting apps, can help you track spending and forecast cash flow, and AI-powered investment tools can make the management and investing of your money simpler and less daunting. Automate as much of the review process as you can, such as categorizing transactions, updating balances, and even sending reminders for your next review. Technology should be a tool that complements your financial decisions, not replace them. Use it to make your life easier so you can focus on building your wealth.

Seek Professional Guidance When Needed

No matter how well you understand personal finance, there are times when getting professional guidance can help you take your financial management to the next level. This could be a certified financial planner, accountant, or tax advisor. If you have a complex financial situation with multiple income streams, business ownership, or significant investments, a financial advisor or accountant can provide valuable insights to help you identify opportunities or areas for improvement. If you find yourself constantly needing advice, consider working with a trusted professional on an ongoing basis, such as meeting with your advisor once or twice a year and using your quarterly review to hit refresh before your meeting.

Conclusion

Performing a quarterly review of your finances is a powerful way to take charge of your money and ensure that it’s working in your best interests. By setting a schedule, gathering and organizing financial documents, tracking your income and expenses, reviewing your debt and credit health, savings, and investment performance, revisiting your financial goals, reviewing your insurance coverage, checking your tax withholding and planning, reflecting on your spending habits and financial mindset, and taking action by creating an actionable plan, you can gain a clearer picture of your financial health and make more informed decisions about your money. Using technology and seeking professional guidance when needed can also help simplify the process and improve your financial literacy. Ultimately, by performing a quarterly review of your finances, you can stay on track to achieve your financial goals and live a more financially secure and abundant life.