Annual Check-up

Around this time each year I conduct an annual financial check-up to ensure that (1) I'm on track or exceeding my goals, (2) no major year-end adjustments are needed and (3) other items such as my e-fund and insurance policies are adequate. The results are as follows:

1. As of today, I have met all of my goals for the year! Anything else accomplished this year will be a bonus.

2. My homeowner's insurance company sent me a renewal notice with a 17% increase in premium. Hmph! Perfect timing. After calling around getting quotes from "reputable" insurance companies (side note...after AIG, I'm not sure what reputable means anymore), I realized that I have the best rate available for my car insurance but I hit a grand slam with my homeowner's policy. I was able to lower my rate by 20%; I saved the proposed 17% increase plus an additional 3% off of what I paid last year. Oh and I forgot to tell you, I'm getting more coverage and paying less money. Yes, more for less.

3. Okay, here is something a little unconventional. I reviewed my living expenses for 2008, took a snapshot of 2009 and determined that my e-fund is still 100% funded. Since this account is solely intended to pay my living expenses for 9 - 12 months should I need it, I am not interested in growing this account more than necessary. With that said, I have decided to take the amount above the necessary e-fund amount (basically the interest earned) and apply this to my mortgage. Remember I'm still trying to pay at least $100 a month towards my principal payments in 2009. The excess amount from the e-fund account will provide an additional $35.50 so now I'm up to $77.50 ($42 + $35.50) in extra principal payments monthly - still $22.50 shy but I'm getting closer.

Do you have an annual review process for your finances? If not, this may be a good time for you to do an annual financial check-up. Feel free to share any insights or best practices you may have with the rest of us. If you have any questions, share those as well.

Let's chat soon!