Are You Due for a Financial Checkup? Here’s What to Do

This illustration shows a checkup for money.
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You go to the doctor for your annual physical to make sure your body’s healthy. But when’s the last time you had a checkup for your financial health?

It’s important to know how well you’re managing your money and where you can make changes for the better. Without a regular financial checkup, you might continue to repeat poor money moves, like giving into frivolous impulse buys or only paying the minimum on your credit cards.

11 Steps to Complete Your Own Financial Checkup

Here’s how to examine and improve your financial health.

1. Update Your Budget

Budgets should not be static. Jump in and adjust yours if it’s not working for you.

A 2021 survey conducted by The Penny Hoarder found that those who keep a budget are less likely to have splurged on something that inhibited their ability to pay bills.

Increase or decrease spending limits in your various budget categories so they fit your current priorities and desires. Test out a different budgeting method or combine a couple to create your own money management plan, like this woman did.

2. Track Your Spending

Do you often wonder where all your money goes? If so, logging every dollar you spend will give you some insight.

Practice tracking your spending for a month, but don’t just include dollar amounts and what you bought. Jot down notes on why you made the purchase and how it made you feel.

If you’re overspending on take-out during the work week because you’re too tired to cook, that could be a sign to start meal prepping. If you love how you feel after taking a drop-in yoga class and realize you want to do that more frequently, you could save money with a monthly pass rather than paying per session.

3. Reduce Your Fixed Expenses

Your fixed costs — the unchanging amount you pay for things like rent, cell phone and auto insurance — may seem inflexible, but they don’t have to be. Research competitors’ rates to negotiate your bills with your current provider or switch to a new one.

When it comes to housing costs, getting a roommate can significantly reduce that fixed expense. Just make sure to screen all potential roommates so you don’t end up with a dud. Or if you’re cool with the nontraditional, these alternative housing options can help you save money.

4. Add to Your Emergency Fund

An unexpected crisis can pop up at any time. Having a robust emergency fund makes those situations a little less stressful.

During your financial checkup, review how much money you have set aside for emergencies. Many experts recommend having between three to six months worth of expenses saved, but you could shoot for having a 12-month emergency fund if you desire a bigger financial cushion.

If you have less than three to six months, make a plan to add to your savings in the year ahead.

5. Check Your Progress on Other Savings Goals

Even if you’ve automated your savings for, say, an upcoming vacation or a home down payment, your goals aren’t something to just set and forget. Use this financial checkup time to see how close — or far away — you are from meeting those goals.

Do you need to adjust your deadline or increase regular contributions to your sinking funds? Are you making the most of your money by putting it in a high-yield savings account or money market account?

6. Assess Your Retirement Contributions

Even though retirement may seem like a long way away, the best time to start saving for it is now. Retirement accounts grow the more time you give them to benefit from compound interest.

Are you meeting your employer’s 401(k) match? Did you up your retirement contributions the last time you got a raise? Could you free up a little more each paycheck to divert to your retirement account, even if it’s just an extra 25 bucks?

Every little bit helps.

7. Evaluate Your Debt Repayment Plan

There are different ways to tackle paying off debt. Use this financial checkup to determine if your current repayment plan is working for you.

If you want the gratification of clearing an entire credit card balance, the snowball method of debt repayment focuses on the smallest balances first. If you want to attack the debt with the monster-sized interest rate, try the avalanche method.

8. Improve Your Credit Score

Your credit score is important when it comes to things like taking out a loan or renting an apartment. A low credit score can mean getting denied — or paying significantly more in interest or for a security deposit.

Conversely, the higher your score, the less money you’ll have to pay.

You can raise your credit score by paying down the balance of your existing loans and credit cards, not incurring additional debt, requesting limit increases on your credit cards and paying your bills on time.

9. Pull Your Credit Report

Your credit report delves into the reasoning behind your three-digit credit score. It details who you owe, how much, recent credit inquiries and if you have any debts that have gone to collections.

You can get a free copy of your credit report from all three credit reporting bureaus — Experian, Equifax and Transunion — once a year at

Review your credit reports to check for any inaccuracies. If something is on your report in error, you can dispute it with the credit bureau and potentially raise your credit score.

10. Update Your Resume

Stay prepared to jump on a great job opportunity by keeping an up-to-date resume.

In addition to making sure your resume is in stellar condition, you’ll want to nail down how to write a winning cover letter.

If you plan on applying for a new job, it’s also useful to know how to negotiate your salary so you get the pay you deserve.

11. Protect Your Assets

To maintain good financial health, it’s smart to have a contingency plan for if something goes wrong.

Disability insurance provides income when you’re sick or injured and can’t work. Home, renters and auto insurance pay to repair or replace your property after an accident or disaster. Life insurance takes care of your family in the event of your death.

Review your various policies to make sure you have the coverage you need.

Nicole Dow is a senior writer at The Penny Hoarder.