Annual physicals help us catch physical health issues early—but what about your financial health? Just like physicals, reviewing your money habits before the new year can save you from bigger financial problems down the line.
“The end of the year is the perfect time for a reset because you can step back, reflect on your current financial situation and start fresh with clear, achievable goals in the new year,” says Tori Dunlap, founder of Her First $100K and host of the Financial Feminist podcast. “It’s sort of like Marie Kondo-ing your money: What serves you? What sparks joy? What can you let go of?”
Understand your financial anxiety with a mental health check
If the thought of a complete financial audit overwhelms you, that’s understandable. Money isn’t just about numbers—it’s also deeply tied to emotions and experiences.
Wealth management consultant Christina Lynn, Ph.D., suggests starting with a mental health check to unpack your financial anxiety. “Unconscious money beliefs, like anxiety or guilt, often lead to avoidance of financial tasks,” Lynn explains. “Fear of change and inertia make it easier to stick with the status quo than to reassess finances and face uncertainty, even when positive change is needed.”
Financial therapist Aja Evans agrees with this sentiment. “People notoriously avoid looking at their money, and that’s a huge barrier to financial wellness,” she says. “They avoid it because they’re anxious or fearful. They don’t want to face the numbers or the lifestyle changes they might have to make.”
This avoidance can increase anxiety, Evans notes, “because you’re imagining the worst without knowing the reality.”
Lynn suggests exploring your money story to identify the financial attitudes and behaviors shaped by early experiences with money. She recommends journaling with prompts like “’What is your earliest memory of money?’ ’What stands out as your most significant memory regarding money?’ [and] ’How were financial roles shared (or not shared) between your parents?’”
“Exploring your personal history with money can offer profound insights and allow you to make more conscious financial decisions moving forward,” she adds.
Evans encourages starting with reflection. “Start by revisiting any goals you set for 2024 and evaluate where you stand,” she says. “Instead of beating yourself up, ask, ‘What were the barriers that got in the way of meeting my goals?’”
Assess your vital signs and address them with a treatment plan
With your mindset in check, it’s time to analyze your financial “vitals”: income, savings, debt and credit score. According to financial adviser Tuula Jalasjaa, “that simple analysis can help you identify any unused funds or high-interest debt that needs addressing.”
If you already have a budget, review how things went. If you don’t, start by analyzing your spending habits in the last 3–6 months. Where did your money go? Where did you want it to go?
Dunlap suggests using this information to identify spending patterns. “This can help you understand which purchases really matter to you so that in the new year, you can start spending based on what you value,” she says.
Once you have a clear view of your money flow, you’ll want to address the pressing monetary issues first. For many, this means tackling debt.
When dealing with multiple debts, Dunlap has a specific strategy. “Write down all of your debts, listing them from highest interest rates to lowest, and how much the minimum payment is on each,” she explains. “Start paying extra on the credit line with the highest interest rate. Keep paying the minimum on the rest. This process works best when you focus on one bill at a time.”
Another vital sign to check is your credit score. A study by Consumer Reports found that 44% of participants identified errors in their credit reports, and error complaints doubled between 2021 to 2023. To get ahead, pull your free annual credit reports from all three reporting agencies—Transunion, Equifax and Experian—and look for errors or improvement areas.