Personal Finance Checklist to Help Organize Your Financial Life

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Personal Finance Checklist

Looking to take control of your money? Use this personal finance checklist to stay on top of the most important aspects of your finances.

The topic of personal finance can be overwhelming if you haven’t dedicated much time and attention to your money in the past. Most people find that it’s not all that complicated once they get started, but knowing where to begin can be a challenge.

This personal finance checklist was created to help you identify the key aspects of your financial life that need attention. If you want to improve your current financial situation and work toward a more financially secure future, be sure to address all of these areas.

While the items in the checklist have been arranged to make some sense chronologically, you certainly don’t need to address them all in this exact order. Feel free to do what makes the most sense for you and your own unique situation.

At the end of the article, you’ll find a link to a printable PDF version of the checklist that you can download for free.

1. Set Financial Goals

Setting goals is an important step because your goals should impact all areas of your financial life. Goals can help to set a course that leads you in the right direction and gives you a chance to achieve the things that you want.

Ideally, you should set short-term (1 year or less), mid-range (1-10 years), and long-term (10+ years) goals. Your goals can involve things like:

  • Reaching a certain net worth
  • Reaching retirement
  • Earning a specific income
  • Achieving a milestone in savings or in a specific account
  • Paying off debt

Those are just a few examples, but your goals may involve something different.

When you’re setting goals, be sure that your goals are measurable and time-sensitive. Goals are measurable if you can easily and clearly determine if they’ve been met. For example, a goal of reaching $100,000 in net worth is better than the goal of improving your net worth because it’s more specific and can be easily measured.

In terms of being time-sensitive, each goal should have a deadline. Instead of setting an open-ended goal to pay off your credit card debt, set the goal to pay off your credit card debt by a particular date.

While setting goals is important, it’s also good to get in the habit of frequently reviewing your goals to keep them fresh in your mind.

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Big Dreams, Daily Joys: Set goals. Get things done. Make time for what matters.
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2. Track Your Expenses

One of the most important aspects of money management is knowing exactly where your money is going and how you’re spending it. By tracking your expenses (as well as categorizing them), you can get a very clear picture of how you are actually spending your money right now.

Tracking your expenses may sound cumbersome, but it really doesn’t need to be very complicated. There are a number of apps like Mint and Every Dollar that can help, or you can use a simple spreadsheet or even pen and paper. You can use our spending log (printable PDF + Google Docs sheet) if you’d like.

Once you’ve been tracking your expenses for a month or so, you’ll probably be very surprised by some of the things that you can easily find out. Just by looking at how much you’re spending in different categories, it’s likely that you’ll be able to immediately identify a few areas where you could easily cut back.

For a more detailed look at the topic, please read my article How to Track Your Expenses.

3. Create a Budget

Creating a budget is, of course, one of the most common pieces of financial advice that’s given. While a budget can be a great tool, I’ve listed it after tracking your expenses because I think it’s helpful to know exactly how you’re currently spending your money before creating a budget.

If you create a budget before tracking expenses, you really don’t know how much you’re spending in the different budget categories and your budget is mostly guesswork. It’s possible that it’s not realistic and you’ll never be able to stick to it.

By tracking your current spending before creating a budget, you can be sure that the budget you’re creating is realistic. In some categories, you may use the exact amount that you’re actually spending as your target for the budget. For other categories where you’ve identified a need to cut back, you can set the budget below your current level of spending.

If you need help with creating a budget, be sure to read my article How to Create a Budget That Works, or enter your email address below to get access to my budget template that you can use. You may also find this article on the recommended budget percentages to be helpful in determining how much you should allow for the different budget categories.

4. Identify Areas for Savings

During the process of tracking your expenses and creating a budget, you’ve identified some obvious areas where you need to cut back. Maybe you’re spending more than you realized on meals at restaurants, alcohol, clothes, entertainment, or anything else. Cutting back in those obvious areas is the first step, but if you really want to trim your expenses, you’ll probably need to go further.

The next step is to find other ways to save, ideally, without having a major impact on your lifestyle. There are many possibilities here and it really depends on your current spending habits, but a few that have saved my wife and me a lot of money include:

  • Canceling cable TV and going with a cable alternative
  • Switching to a discount wireless phone provider (we use Cricket Wireless)
  • Switch energy providers (may or may not be an option for you, depending on where you live)
  • Allowing Trim to negotiate our internet bill
  • Buying mostly secondhand clothes from yard sales and consignment shops
  • Shopping at a discount grocery store (Aldi, in our case)

If you take the time to scrutinize the different line items in your budget, you can probably find several ways to save more each month. This is a process that takes a little bit of time and you’re not likely to implement every change at once, but if you’re looking for ways to save, there are a lot of options out there. For some ideas, see my article 40 Smart Ways to Reduce Your Monthly Bills.

5. Start an Emergency Fund

None of us likes to think about unexpected emergencies that could happen in our lives, but the reality is that we never know what could happen. If we’re not prepared for a financial emergency, the result could be significant damage to our overall financial situation.

Things like the loss of a job, health emergency, or an issue with a family member can happen at any time. If you have money set aside in case of an emergency, you’re prepared to get through it without any major damage to your finances. Without an emergency fund, you could wind up with large amounts of debt that you can’t overcome, or you may struggle to be able to pay your bills.

Most experts recommend that you have enough money in an emergency fund to cover at least 3-6 months of living expenses. The amount that you need really depends on your own situation. If you have an inconsistent income (like if you’re self-employed) or if you support a family on a single income, you’re at a slightly higher risk. In that case, it makes sense to be on the higher side of that range.

Your emergency fund should be kept in an account that you can access quickly, like a savings account or money market account. Some people like to keep their emergency fund in other types of investments, but you should be sure that you’re not taking an excessive risk with your emergency fund and also be sure that you can access it quickly without penalties.

6. Save for Retirement

Regardless of how old you are, it’s never too early to start saving for retirement. In fact, your younger years are the best time to save and invest for retirement because of the power of compound interest.

If your employer offers a 401(k) as a part of your bonus package, be sure that you are contributing automatically from each paycheck. Automatic contributions are great because the money will be taken from your paycheck and deposited to your 401(k) automatically before you’re even paid, so there’s no way for you to blow that money or forget to make the contribution.

Aside from the automatic contributions, there are several benefits to 401(k) plans, including:

  • The contribution limits are high (you can contribute up to $19,500 in 2020)
  • Your contributions can reduce your taxable income
  • Many employers will match all or a portion of your contributions

The percentage of your salary that you contribute to a 401(k) will depend on several different factors, but it is recommended that you contribute at least enough to take advantage of the full match from your employer. For example, if your employer will match your contributions up to 5% of your salary, you should be contributing at least 5% in order to get all of the matching benefits that are offered to you.

Roth IRAs and Traditional IRAs are also excellent options for your retirement savings/investing. The contribution limits for IRAs are much lower than the contribution limits for 401(k)s ($6,000 total in a Roth and/or Traditional IRA for 2020). Like a 401(k), your Traditional IRA contributions can reduce your taxable income. Contributions to a Roth IRA will not reduce your taxable income, however, unlike a 401(k) or Traditional IRA, you will not be taxed on the distributions from a Roth IRA.

For a more detailed look at the topic, please read 5 Steps to Get Your Retirement Savings on Track.

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7. Check Your Credit Report and Credit Score

Your credit score will impact things like:

  • Your ability to qualify for a mortgage or loan
  • Your credit card applications
  • The interest rates you’re charged
  • Employment applications
  • Rental applications

With so much at stake, it’s critical that you work to establish a good credit score and monitor it periodically. Your credit score will be dictated by the details that appear on your credit report, so you should also check your credit report for accuracy and make sure any errors are fixed.

By law, you’re entitled to a free copy of your credit report once every twelve months from each of the 3 major bureaus: Equifax, Experian, and TransUnion. AnnualCreditReport.com is the official place to get your free credit report. There are many others that attempt to look official, but it’s recommended that you use AnnualCreditReport.com for security reasons.

You can get a copy of your credit report from any of the three bureaus. You can get them all at the same time, or spread them out. Since you can get a copy from each bureau every twelve months, I’d suggest getting one at a time and spread them out so you’re getting one every four months. The reports can vary a little bit from one bureau to another, but they should be mostly the same.

Check your credit report to make sure that everything is accurate. If you have tradelines on your report that you don’t recognize, follow up with the creditor (their contact info should be listed on the report). If there are any errors or inaccuracies, file a dispute with the bureau that is showing the inaccurate information.

The only downside to these free credit reports is the fact that they don’t include your credit score. However, there are other ways to get your credit score for free. Your credit card issuer may allow you to check your FICO score through the online dashboard for your credit card.

Alternatively, you can use a free service like Credit Karma, which will provide you with your credit score and basic credit monitoring for free. The monitoring can help you to stay on top of your credit and identify any potential problems as soon as possible.

8. Choose a Debt Payoff Approach

If you have consumer debt like student loans, car loans, credit cards, or other personal loans (mortgage debt is usually excluded from this), you should decide on a plan to aggressively pay down that debt and eliminate it as soon as possible.

The monthly payments on your debt can have a huge impact on your budget, and if/when you’re able to get rid of that debt, you’ll have much more disposable income that you can use in other ways.

When it comes to debt payoff, there are two different approaches that are both popular and effective. The debt avalanche involves prioritizing your highest-interest debt first and then working your way down to the debt with the lowest interest rate. The debt snowball approach, popularized by Dave Ramsey, involves paying off your smallest debt first regardless of the interest rate.

You can read a much more detailed explanation of the two different approaches in Debt Snowball vs. Debt Avalanche. It doesn’t really matter which one you choose, so take a look at the details and pick the one that appeals the most to you.

You can also use our debt snowball worksheet to stay organized and track your progress.

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The Total Money Makeover Workbook: Classic Edition: The Essential Companion for Applying the Book’s Principles
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The No-Spend Challenge Guide: How to Stop Spending Money Impulsively, Pay off Debt Fast, & Make Your Finances Fit Your Dreams
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The Total Money Makeover Workbook: Classic Edition: The Essential Companion for Applying the Book’s Principles
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The Total Money Makeover Workbook: Classic Edition: The Essential Companion for Applying the Book’s Principles
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The Financial Peace Planner: A Step-by-Step Guide to Restoring Your Family's Financial Health
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The Financial Peace Planner: A Step-by-Step Guide to Restoring Your Family's Financial Health
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9. Calculate and Track Your Net Worth

Net worth is one of the most important personal financial metrics because it gives you a big-picture view of your financial situation. If you’re working towards a retirement goal, net worth is a number that you should definitely be monitoring.

Calculating your net worth may sound difficult or complicated, but it’s actually very simple. Just add up your assets and subtract your liabilities. If you need help, see my article How to Calculate Your Net Worth, or simply use the free app Personal Capital to do the work for you.

Once you’ve calculated your net worth, it’s a good habit to track your net worth and monitor your progress. The nice thing about using an app like Personal Capital is that it will integrate with your financial accounts and automatically calculate your net worth, so you can simply login at any time to see your current status.

It’s very possible that your net worth could be negative, especially if you’re young. Young adults tend to have student loan debt and relatively few assets, so it’s very common for net worth to be negative. Of course, you don’t want it to stay negative forever, but don’t beat yourself up if you have a negative net worth right now.

My article 7 Steps to Grow Your Net Worth will help you to make progress and improvement.

10. Draft a Will

Drafting a will may not be the most exciting part of personal finance, but it’s important, especially if you have a family. If you already have a will, it’s a good idea to review it periodically to make sure that everything is still relevant and update anything that needs to be changed.

When it comes to drafting your will, you can hire an attorney in your local area or use Quicken WillMaker & Trust to save some money and do it yourself.

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11. Designate or Update Your Beneficiaries

Take some time to check your financial accounts and insurance policies and designate or update (if needed) the beneficiary. This probably isn’t something that you think about very often, but there are a number of situations like marriage, divorce, the birth of a child, or other family changes that might impact who you want to have listed as your beneficiary.

12. Evaluate Your Insurance Needs

Over the course of time, your financial situation will change, as will your family situation. It’s a good idea to periodically evaluate your current insurance policies to make sure they’re meeting your needs, and consider other types of insurance that may be a good fit for you.

Of course, there are a number of different types of insurance policies, and here are a few that you may want to think about:

  • life
  • disability
  • long-term care
  • homeowners
  • health
  • auto

Check your existing policies to be sure that details like the coverage limits and deductibles still meet your needs. If not, make adjustments to the policies as needed.

It’s also a good idea to occasionally shop around to be sure that the premiums you’re paying for your insurance policies are competitive. You can use a tool like PolicyGenius to compare prices and see if you can find better options.

13. Review Your Investments and Rebalance if Needed

How often do you review the investments in your portfolio? You should be checking them occasionally and rebalancing them if needed. You don’t need to check your investments all the time, but monthly or quarterly check-ins are a good idea.

If you’re using a dashboard like Personal Capital, this is pretty easy because you can simply login and see all of your investments in one place. You can check the reports available from Personal Capital to see how your investments are performing.

Asset allocation and rebalancing is too big of a topic to cover in this article, but if you’re not comfortable handling this on your own, one of the best options is to automate your investing with M1 Finance or a robo advisor like Betterment. You can read the article Betterment vs. Wealthfront vs. M1 Finance for help choosing the right option.

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14. Consider Other Savings Goals

Aside from things like retirement and debt payoff that we’ve already covered, there may be other goals that you’re saving toward. This could include saving for things like:

  • College
  • Weddings
  • Vacations
  • Car
  • House

Whenever you’re saving for something big, it’s a good idea to have a separate savings account or an investment account specifically for that one purpose. That way you’re able to easily track your progress, and you know how much you’ve saved for every purpose.

With online banks like CIT Bank and Capital One, you can create multiple savings accounts and name them according to their purpose. This is an easy way to organize and track your savings.

It’s a good habit to periodically check your savings goals to see your progress and think about any other savings goals that you should add.

15. Increase Your Income

The last item on our personal finance checklist is to increase your income. Assuming you keep your spending the same, increasing your income will allow you to save and invest more according to your own priorities.

There are several different ways that you can increase your income. Here at Vital Dollar, we publish a lot of articles related to side hustles, and while side hustles are a great option, you may want to consider your existing job first. The ideal way to increase your income would be to get paid more for the work you’re already doing. Increasing your income through your job could involve:

  • Getting a raise
  • Getting a promotion
  • Taking a higher-paying job

If none of those are good options for you, there are always plenty of side hustles that you could consider.

When I was in my late 20’s and looking to increase my income, I started a blog as a side hustle. About a year and a half later I left my full-time job for full-time self-employment as a blogger. Now, more than 11 years later, this change has had the biggest impact of any decision on my finances.

Of course, blogging is just one side hustle option and there are plenty of others as well. You can take our side hustle quiz to find suggested side hustles that may be a good fit for you, or check out my article with more than 150 side hustle ideas.

Download the Printable Personal Finance Checklist PDF Here.

Printable Personal Finance Checklist PDF




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