Start with Your Net Worth Snapshot
Understanding where you stand financially begins with a clear net worth snapshot. This high level view helps you evaluate your progress and identify areas that need attention. Here’s how to calculate it step by step:
List Your Assets
Tally up everything you own that holds financial value:
Bank Accounts: Checking, savings, and certificates of deposit
Investments: Stocks, mutual funds, retirement accounts, cryptocurrency
Property: Real estate, vehicles, or other valuable physical assets
Be sure to use current market values where applicable.
Add Up Your Liabilities
Now list everything you owe:
Credit Card Balances
Student Loans
Mortgages
Car Loans
Any Other Debts
Use the latest available balances, even if they’ve changed recently.
Calculate Your Net Worth
Simple formula:
Net Worth = Total Assets Total Liabilities
This number gives you a snapshot of your financial health.
Compare Year Over Year
Check last year’s net worth calculation.
Has your net worth grown? That’s a positive sign.
If it’s declined, look more closely at spending, debts, or investment performance.
Tracking this yearly helps monitor financial momentum and make smarter decisions for the future.
Revisit Your Budget (and Reality)
Budgets are only as good as how they hold up in the real world. Start by pulling up your actual spending from the past year credit card statements, bank logs, app data and compare it to the budget you set. See where you went over, where you underspent, and what categories no longer reflect your life. Maybe “dining out” quietly doubled. Maybe that streaming bundle is eating $100 a month.
Once you’ve got the truth on paper, make some cuts. Eliminate the expenses that bring little value, and squeeze down what you don’t truly need. This is less about going minimalist and more about trimming the fat so you’re not wasting dollars on autopilot.
Don’t forget to look ahead. 2026 is around the corner, and it’s likely coming with higher costs. Inflation will affect groceries and services. Rent or interest rates might climb. Health and home insurance premiums are expected to jump as providers adjust to economic shifts. If you know these hikes are coming, bake them into your plan now. Future you will thank you.
Evaluate Your Savings Goals
Start with your emergency fund. Still hovering in that 3 6 months’ worth of expenses range? Good. If not, this is the time to build it back up. Life’s never on pause unexpected job loss, medical bills, or surprise home repairs can hit without warning. Liquid, low risk accounts are still your best bet here.
Next, take stock of your big ticket savings goals. Are you on pace for that down payment, grad school tuition, or dream trip? Check your progress against the target. If you’re behind, you’ve got options: increase your monthly transfers, cut back on non essentials, or shift timelines slightly.
Now look under the hood of your system. Are your automatic transfers still dialed in? What worked last year might not cut it now, especially if your income changed or expenses crept up. Tweak the amounts, the timing whatever helps you hit the goal without squeezing your day to day life. Small, consistent moves > big, stressful adjustments.
Review Debt Strategy
Tackling debt with a clear plan can free up your cash flow and reduce financial stress. With shifting economic conditions and interest rate changes likely post 2025, now is an essential time to reassess your approach to debt.
Stay Alert to Interest Rate Trends
Interest rates surged in recent years but may stay volatile into 2026.
Revisit variable rate balances (like some credit cards or student loans) to see how much they’re costing you.
If you have fixed rate debt, compare those rates to current offerings especially for mortgages and auto loans.
Consider Consolidation or Refinancing
If you’re carrying high interest debt, consolidation or refinancing could reduce your total interest paid and simplify your payments.
Explore personal loans with lower rates to pay off multiple high interest accounts.
Use balance transfer offers strategically only if they align with your ability to pay them off before promotional rates expire.
Check credit score requirements to ensure you qualify for the most favorable terms.
Reassess Your Payoff Timelines
Are you still on track to meet your original debt free goal?
Consider updating your timeline based on your current income and expenses.
For large debts, map out a step by step payoff plan (avalanche or snowball methods are both effective).
Keeping your debt strategy updated ensures your financial resources are being used wisely and helps you avoid unexpected setbacks.
Update Investments and Retirement Planning
Start by checking whether your asset allocations still match your risk profile. If you haven’t looked at your portfolio in a while, now’s the time. Markets shift, and so do life stages. If you’re nearing retirement or just feeling more risk averse after a bumpy 2025, consider dialing back exposure to high volatility assets.
Next, make sure you’re fully using your tax advantaged accounts. Are you maxing out your 401(k)? Contributing to an IRA or Roth IRA? If not, plan catch up contributions early in the year rather than scrambling in December.
Rebalancing is essential. The market in 2026 may look nothing like it did two years ago, and that means your portfolio’s weightings might have drifted. Realign to reflect your original strategy or adjust your strategy if your goals have changed.
If your portfolio has passed the $100K mark, it’s probably time to talk to a fiduciary. A second set of (unbiased) eyes can help fine tune your plan, dodge unnecessary fees, and keep your long term goals on track.
Check Insurance Coverage
Insurance is one of those things you don’t notice until you’re stuck without it. Now’s the time to dig into your policies: health, life, disability, home, and auto. Do they still make sense for how you’re living today? If you’ve switched jobs, relocated, added a family member, or made any lifestyle changes, your old coverage might be outdated.
If rates have crept up over the past year, don’t just accept the increase. Get fresh quotes. Insurers change pricing quietly, and loyalty doesn’t always pay. Especially with auto and home, you might find better coverage for less, or at least force your current provider to match a competitive rate.
Look for gaps, too. Maybe you picked a low health coverage tier last year and got burned with out of pocket costs. Or maybe you still don’t have disability insurance, even though your income depends on you staying healthy. These things aren’t optional when you think long term.
A quick audit now beats a regret later. Don’t skip it.
Reflect on Big Life Changes
Life doesn’t wait for your budget to catch up. Got married? Divorced? Welcomed a baby? Switched careers or moved across the country? Each of these moments reshapes your financial foundation, often in more ways than you expect.
A new marriage could mean shared income or shared debt. A divorce might split assets, force housing changes, and shift insurance needs. A new baby brings upfront costs (think hospital bills, gear, childcare) and longer term ones (education, shifting priorities). Job changes and relocations? New salaries, tax implications, and adjustments to retirement plans all come into play.
These events aren’t just personal they’re financial turning points. They require updates to your budget, savings strategy, insurance coverage, estate documents, and long term goals. Treat them seriously, and reassess every major money category in their wake.
Need a roadmap? Check out Navigating Major Life Changes with Smart Financial Planning for a full breakdown.
Tidy Up the Admin Side
This part isn’t flashy, but it matters more than most people think. Start by updating passwords on your financial apps. If you’re still using the same combo from five years ago or worse, from college it’s time to lock things down. Use a password manager if you have to. Better security is boring until it saves you from a disaster.
Next, double check your account beneficiaries and legal documents. Life changes divorce, kids, new relationships don’t automatically update your will or 401(k) paperwork. If it’s been a few years since you looked, now’s the time.
Finally, back everything up. Tax returns, insurance policies, estate documents store them somewhere safe and secure. Physical copies in a fireproof box, digital versions in encrypted cloud storage. If something happens, you or your family will be glad you were thorough.
Skip this stuff, and you might not notice until it’s too late. Do it now, and thank yourself later.
Set Concrete Goals for 2026
Don’t set ten vague goals. Pick one to three that actually matter and put numbers on them. Whether it’s saving $5,000 for a house down payment, paying off a $2,000 credit card balance, or raising your 401(k) contributions by 2%, make it measurable. Clarity beats ambition.
Next: break those goals into bite sized moves you can build into your monthly habits. Use budget categories, calendar reminders, or whatever system keeps you honest. If it doesn’t fit in your month to month, it won’t happen.
Then, automate what you can. Auto transfers to savings. Scheduled debt payments. Recurring investment contributions. The goal is to make progress without needing to think about it every week.
Halfway through the year, check back. See what’s working, what slipped, and whether your goals still make sense. Adjust if needed but stay committed. Momentum beats motivation every time.