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2021 Year-End Financial Planning Checklist


During the third quarter of the year I sit down to complete my annual goals and start looking forward to the next year.

Why should you spend time (likely to be hours) analyzing your personal finances each year? If you don’t spend time understanding where you are and how far you’ve come, how will you know when you’ve reached your goals? Tracking spending, saving and debt payoff is key to preparing to reach any financial goal.

I start with analyzing my family goals, then personal, business and finally my financial goals. I am going to share my financial planning checklist. I hope it helps you as you start reflecting on 2021 and look ahead to 2022.

1. Gather documentation

The first step in end-of-year personal finance planning is to gather any documentation that reports any change to your financial situation. I personally like to gather it all and have printed copies available. It’s easier for me to go back and forth between multiple financial documents when they are printed. Some documentation examples include the following:

paystubs/personal income statements
bank statements
credit card statements
loan statements (auto, personal, student, etc.)
mortgage statements
budget app statements
workplace retirement and/or pension statements
brokerage account statements
college or minor account statements
social security statements

Last but not least, retrieve your financial goals documentation.

2. Categorize and summarize spending

It’s important to analyze how much money you received and what you spent that money on and how much of it you were able to keep, save, or invest. The next step is to categorize all of your spending and income into your own personal balance sheet. Your personal balance sheet is a snapshot of your net worth at a given point in time. You can use Personal Capital’s free online financial tools for easy calculating and archiving for next year.

For your end-of-year planning, simply link all of your financial accounts to get the sum of your assets and liabilities. Assets can be liquid, such as cash assets, investments or assets that can be easily sold for cash. Assets can also include physical items you own such as houses, artwork, or automobiles, for example. Your liabilities list will include all the money owed to creditors.

3. Analyze last year versus this year

Analyzing your personal finances year-over-year allows you to do several things. The first is determining if your net worth is increasing or decreasing. Your Personal Capital Dashboard will show you exactly what amounts increased or decreased, year-over-year. This is extremely important so that you know what actions you need to take.

Second, it helps you look at every expense you had during the year and determine if it was worth it to you. There may have been subscriptions that you rarely used, overspending in certain areas, or investment fees you were unaware of. This is a very important step, don’t skip it!

4. Celebrate your accomplishments and set new goals

Thinking about money and personal finances can be stressful. Many retirees fear inflation more than the rising costs of healthcare (Personal Capital and Kiplinger, 2021). It’s understandable that reviewing your personal finances can cause some anxiety. Focus on your accomplishments this year.

We tend to focus on the negative, but reflecting on past practices and planning for the future is something to be proud of.

Next year’s goals can be to tackle one specific area or have several goals in multiple areas. It was always better for me to list all of my financial goals, short and long term, then prioritize them. Then, I tackle each goal, one by one, starting with the highest priority. Before you know it, you’ll be able to check off that final goal.

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Featured individual is a paid spokesperson and not a client of Personal Capital Advisors Corporation (“PCAC”) and does not make any endorsements or recommendations about securities offerings or investment strategy. The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

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