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Your Bank > Education and Advice > CNB University

Checklist: Annual Financial Check-Up

James P. Terwilliger
James P. Terwilliger, PhD, CFP® is Senior Vice President - Group Manager, Financial Planning Strategies and can be reached at JTerwilliger@CNBank.com or (585) 419-0670 x50630.

Too many people wait until they file their income-tax returns to evaluate the preceding year's finances and plan for the next. You should really begin much sooner, though, perhaps before year-end. This will give you plenty of time to analyze what you have accomplished and to plan for what you hope to accomplish. A checklist of questions might help.

  1. What are your financial goals? Before you do anything with your money, you should decide how you want to spend it. You should itemize what you have presently, what you need for the year ahead, and what you hope to have ten, twenty, or thirty years in the future.

  2. Over the past year, have you made progress toward achieving your goals? You should probably compare the performance of your investments to the goals you've established with regard to those investments for the year. The results of this analysis will help you decide whether or not you should alter your investments.

  3. Are any changes about to occur that will affect either your immediate needs or your long-term goals? A job change, for example, may drastically alter your income and your lifestyle. Other circumstances that may affect your finances might include buying a new house, financing an education, or paying for a wedding. Planning at least a year in advance will help you to adjust to these changes financially.

  4. What can you do to minimize your taxes? A general rule for tax purposes is to defer income to the next year while accelerating deductions for the present year. To defer income, you might postpone selling assets or collecting bonuses, and you might also purchase Treasury bills or other investments that will mature the following year. To accelerate deductions, you might double up on your charitable contributions or invest in a tax shelter.
     
    Quite often people will also make contributions to their Individual Retirement Accounts at the last minute for an additional deduction. However, in the long run it's much better to make your IRA deposits early in the previous year rather than wait until you file your tax return the following year.

  5. Do you need any additional help to implement your plans for the future? A lawyer, an accountant, a stockbroker, and a trust officer can be a tremendous help in your financial matters. If you're not progressing as you would like, or if you find you don't have the time to manage your money properly, you might consider hiring a professional. It could be the one investment that makes all the difference.

Let us assist you to take control of your financial future. Our financial planning services are available to help develop your personal financial plan, customized to reflect your goals and unique circumstances. For further information, please contact James Terwilliger, VP, CERTIFIED FINANCIAL PLANNER™, 585-419-0670 ext 50630 or email jterwilliger@cnbank.com.