Financial To-Do List

The start of a new year is the perfect time to review and assess your financial well-being. Taking the time to evaluate how your financial situation has evolved can help ensure you are still on track to reach your goals. The checklist below is a simple way to get started. You can also reach out to your advisor to discuss preparing a financial plan, which will also take many of these factors into account.

1. Build Your Emergency Fund

An emergency fund is an essential part of your financial plan. It serves as a cushion against unexpected expenses, like medical bills, car repairs, or job loss. During an emergency, these funds can help reduce stress and prevent taking on debt or use credit cards to cover unexpected expenses. Building up an emergency fund takes time, but it’s worth the effort.

The simplest way to build up your emergency fund is to set up an automatic contribution from your checking account into your savings account. After you take the time to budget your necessary expenses, contribute to your emergency fund from your excess. Some people find it helpful to set up this automatic transfer on payday, as a way to “pay yourself first.”

To maintain your emergency fund, it is important that you access it only when your normal paycheck cannot cover an unexpected expense. This means being sure you are operating within your budget, and not spending beyond your means on vacations, gifts, or luxury items. Keep your emergency fund in a high-yield savings account or a money market fund. There are plenty of options, and your financial advisor can help you decide on a good fit for you. The key here is not to be risky with this pot of money.

How Much Cash to Keep on Hand?
Married & One Spouse Works 6 months
Married & Both Spouses Work 3 months
Single & Two Sources of Income 3 months
Single & One Source of Income 6 months
Substantial Wealth (i.e. Trust Fund) 3 months

1 month = the total cost of your fixed expenses (rent, mortgage, utility bills, groceries, etc.) for one month

2. Eliminate High-Interest Debt

If you are currently carrying a revolving balance on a credit card, you should prioritize paying this down as soon as you have a small emergency fund built. If you have multiple debt streams, you can prioritize by either the smallest amount (snowball method) or the largest interest rate (avalanche method).

If you need to buy yourself time, you may consider transferring the balance to a different card that offers 0% interest for a year or longer and pay the balance off as soon as possible, preferably before interest payments resume.

According to WalletHub’s Credit Card Landscape Report, the average credit card interest rate was 20.16% in 2022!

Eliminating high-interest debt is a powerful way to better your financial health and set yourself up for future success.

3. Check Retirement and HSA Contributions

The beginning of the year is a great time to review your retirement contributions. This is especially helpful if you are working with a company that provides matching contributions to a defined contribution plan such as a 401(k) or 403(b). The best practice is to contribute the maximum amount, usually defined as a percentage of your salary, that your employer will match to take advantage of that workplace benefit.

If you have already built up an emergency fund and are contributing to your employer’s retirement plan, consider making additional retirement contributions to a ROTH IRA. You can contribute excess post-tax income to a maximum of $6,000 a year. If you are over age 50, that limit is $7,000. (These limits are as of 12/31/2022. For the most recent numbers, check the IRS website.)

If you were not financially able to contribute to an IRA during the past year, you may still contribute and receive a deduction until the tax filing deadline on April 15th of the next year.

What is an HSA?

HSA (Health Savings Account) is a triple-tax advantaged savings account, generally for people who have a high-deductible healthcare plan. Contributions are made with pre-tax income and are both tax-free and tax-deductible. Distributions made to qualifying medical expenses are not subject to tax. You own your HSA and funds will carry over into the next year. There is currently a limit of $3,650 for an individual plan and $7,300 for family coverage.

What is an FSA?

FSA (Flexible Spending Account) is also pre-tax income and the distributions for medical expenses are not subject to taxes. The key difference is that an FSA is owned by your employer and generally, you will need to use all the funds deposited every year. Unused funds will not roll over into the next year and you will not be able to transfer the funds into another FSA. The current maximum contribution to an FSA is $2,850.

While you are reviewing your retirement contributions, take a moment to also check on any contributions to an HSA or FSA account for the year.

Ensure that your contributions to any health savings plan align with your needs and savings goals. It may make sense to increase HSA contributions to take advantage of the tax benefits. Alternatively, you may decide to decrease your FSA contributions if your medical needs have not been as high as you anticipated.

4. Review Insurance Coverage

Take some time to review your insurance policies and make sure that your coverage is up to date.

It is important to make sure that you have shopped and reviewed your Property & Casualty insurance policy in the last 5 years. This will help ensure that you are getting the best coverage for the best price.

Know how much life insurance coverage you have and what type of life insurance you have. Term life insurance is typically the least expensive and provides coverage for a specified period, while whole and universal life insurance can provide lifelong coverage and may provide cash value that can be accessed during your lifetime. Check how much coverage you have and whether it is still sufficient for your family’s needs.

Finally, check that you have named BOTH a primary and a contingent beneficiary on all your life insurance policies and retirement accounts. This will ensure that your policy or account will be passed on to your designated beneficiary if you and your primary beneficiary pass away simultaneously.

5. Set Your Goals

Reflect on the past year and write down your favorite and least favorite things you spent money on. Find out what brings joy to your life and prioritize your spending habits around that. If you really enjoy a date night, then maybe it is a good idea to sacrifice in a different area of your life, like making coffee at home, and repurpose those dollars towards date nights in your budget. Whatever makes you tick, write that down and create a responsible spending strategy toward achieving those things.

Evaluate both your short-term and long-term goals. Think about what you want to accomplish whether that is saving up for a vacation or planning for retirement. Write these goals down, be sure they are realistic, and make a plan to achieve them. That way, you can review them periodically to make sure you are staying on track. Keep in mind, your financial advisor is a great resource to help you plan and execute your financial goals.


  Build Your Emergency Fund
  Eliminate High-Interest Debt
  Check Retirement Contributions
  Review Insurance Coverage
  Set Your Goals

Remember, financial planning is life planning, so take a moment to review these tips as you reflect on the new year and prepare for your future financial goals. Reach out to your advisor if you have any questions!

Greenwood Capital is an SEC registered investment advisory firm. This material has been prepared for information purposes only, and is not intended to provide, and should not be relied on solely for tax, legal or accounting advice. The information contained within has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy.  The opinions expressed are subject to change from time to time and do not constitute a recommendation to purchase or sell any security nor to engage in any particular investment strategy. Investment Advisory Services are offered through Greenwood Capital Associates, LLC, an SEC-registered investment advisor.

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