The start of a new year is a natural moment for reflection. Most people think about health goals, exercise routines, or personal resolutions—but it’s also one of the best times to step back and review your financial life.

A beginning-of-year financial checkup doesn’t have to be overwhelming. In fact, breaking it into a few core categories can make the process manageable and surprisingly productive.

Below is a practical framework to help you start 2026 with clarity and intention.

1. Personal Issues: The Foundation of Every Financial Plan

Financial planning doesn’t begin with accounts or spreadsheets—it begins with life.

The first step is to assess how you did relative to the goals you set last year. If you outlined goals at the start of 2025, compare where you are now to where you hoped to be. You don’t need to “ace” the exercise. Life changes, priorities shift, and plans evolve. The point is awareness.

Next, identify new goals for the year ahead or beyond. Assign priorities and timelines. A large family trip, helping a child with education expenses, or planning a major purchase all need to be reflected in your financial plan—both in timing and funding.

It’s also important to think through possible life events that could affect your finances this year:

• Marriage, divorce, or a new child
• Job changes (planned or unexpected)
• Retirement—yours, a spouse’s, or even a parent’s
• Health issues that could create a significant resource drain
• The passing of a family member, especially when foreseeable

Finally, take note of any milestone ages coming up:

• 62 (earliest Social Security eligibility)
• 65 (Medicare eligibility)
• 70 (latest age to claim Social Security)
• 73 (Required Minimum Distributions from IRAs)

These milestones often trigger decisions that benefit from advance planning.

2. Cash Flow: The Engine That Powers Everything

Cash flow is the foundation of financial stability—it pays for everything.

Start by asking a simple question: Will income or expenses change meaningfully this year?
If the answer is no, great. If the answer is yes—due to job changes, retirement, or new expenses—then it’s time to revisit your cash flow plan and see how those changes affect both this year and the years ahead.

This is also a good time to review employee benefits:

• Are you maximizing retirement plan contributions?
• Are you eligible for catch-up contributions?
• Are bonuses or special contributions subject to Roth-only rules?

Healthcare decisions made during open enrollment also deserve attention:

• High-deductible plans open the door to Health Savings Accounts (HSAs), which require planning.
• Non–high-deductible plans may rely on Flexible Spending Accounts (FSAs), which require careful spending to avoid forfeiting funds.

If you’re eligible for an IRA, confirm:

• Whether your income allows a contribution
• Whether a Roth or traditional IRA makes sense
• Whether a spousal IRA applies

Be cautious with after-tax contributions to traditional IRAs—they often create complications later.

Other cash-flow-related items to review:

• Are you saving adequately toward your stated goals?
• Have you spent leftover FSA funds before deadlines?
• If you take Required Minimum Distributions, should a Qualified Charitable Distribution (QCD) be part of your plan?
• If you make annual gifts, are you tracking and planning them strategically?

3. Assets and Debt: Aligning Structure With Strategy

If you used emergency funds last year, this is the time to replenish them.

You should also consider whether you plan to buy or sell a business or real estate this year. These transactions often have ripple effects across taxes, cash flow, and investment strategy.

From an investment standpoint:

• Review your risk tolerance, especially if it hasn’t been revisited recently.
• Assess portfolio performance—particularly after a strong market year—and reset expectations.
• Rebalance portfolios as needed, being mindful of tax consequences in taxable accounts.

It’s also important to understand the difference between asset allocation (what you invest in) and asset location (where those investments are held). Generally:

• Tax-efficient assets belong in taxable accounts
• Tax-inefficient assets belong in tax-deferred accounts
• Roth accounts are often best used for higher-growth investments

On the debt side:

• Explore refinancing opportunities if your mortgage was obtained recently
• Create a targeted plan to eliminate high-interest debt
• If you are a co-signer or guarantor on a loan, confirm the status and ongoing risk
• If borrowing is likely this year, review your credit report and score early
• Consider freezing credit if identity theft has been an issue

4. Tax Issues: Planning Early Beats Reacting Later

Early in the year is the best time to organize tax documents. Most W-2s and 1099s arrive by January 31. Having everything ready early makes tax filing smoother—and your tax preparer will appreciate it.

Other tax-related items to consider:

• Did you make taxable gifts last year or plan to split gifts?
• Is a Roth conversion appropriate this year?
• If you’re well below the top of your tax bracket, early Roth conversions can reduce lifetime taxes and shift growth into tax-free accounts sooner.

If you missed an IRA contribution for the prior year, remember you typically have until Tax Day to make it.

For taxable investment accounts:

• Review unrealized gains and losses
• Create a tax-loss harvesting strategy early in the year
• Be aware of mutual funds or ETFs that generate capital gains distributions

Proactive tax planning can materially reduce future tax liability.

5. Insurance and Legal Matters: The Safety Net

Insurance reviews are best done periodically, especially after life changes:

• Health insurance needs may change with new treatments or procedures
• Life insurance coverage may need to increase or decrease as family needs evolve
• Long-term care planning, while uncomfortable, benefits from early analysis
• Property and casualty coverage should reflect renovations, new valuables, or changing risks

Legal issues deserve attention as well:

• Review estate plans after major life events
• Confirm account titling and beneficiary designations
• Understand your responsibilities if you serve as executor, trustee, or fiduciary
• Be aware of state-specific rules, such as Massachusetts estate tax thresholds
• Consider how new laws—like the One Big Beautiful Bill Act (OBBA)—affect planning, even if federal estate tax limits seem high

The Bottom Line

A beginning-of-year financial review isn’t about perfection—it’s about alignment.

Taking time to review personal goals, cash flow, assets, taxes, insurance, and legal issues can help ensure your financial plan reflects where life is today and where it’s heading next.

Small, thoughtful adjustments early in the year often prevent bigger, more stressful decisions later.

You can go through this helpful checklist in two ways: