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It’s another year, and we are already making plans for the year. Finances are one of the major levers in achieving your material goals for the year. Creating a sound financial plan for yourself might be your first step in having a great year. In contrast, reaching some milestones might also impact your finances. For instance, starting a family, business, or building your dream home. It is essential to have a plan for the year and stick to it. Although, flexibility might also be beneficial in some cases. 

This article will discuss the possibility and importance of having an annual financial plan. So, keep reading!

What is an Annual Financial Plan?

As its name implies, It is a document that shows a record of where you are in terms of finances. In most situations, people draw up a financial plan when working towards a goal. Managing your finances without a proper plan in place might be tedious. A couple of apps can help manage and keep track of your finances. A financial plan can be majorly defined by your income status, debts, assets, etc. A well-structured plan covers every aspect of your finances. With the help of a plan, you can see where you are right now financially and areas that need to be worked on to achieve your financial goals. 

One of the significant reasons people draw up a plan is to reach a milestone. Having a goal helps keep you on track throughout the duration. 

Annual Financial Plan Checklist

As mentioned above, you need to create a plan to reach your goals. A checklist helps you tick off the important factors in the plan. To do so, you may need to consider the following factors:

Create a financial inventory

Audit your finances. It would help list your debts, assets, credits, and other essentials to know where you stand financially. This will help you plan your finances better. 

Set Your Financial Goals

Set short-term, mid-term, and long-term goals for the year. These goals will help you measure progress. 

Review your savings and investment plan

Your savings and investments need a review from time to time. It is vital to take note of your investments and savings during your annual financial plan. You might also want to rebalance your portfolio to fit your new interests during the process. 

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Importance of having an Annual Financial Plan

An annual financial plan could be the lever to achieve other goals in the year. Asides from that, you need to plan to do the following: 

Retirement and Investing

An annual financial plan could help you set your retirement and investment plan in motion. A retirement plan should be a top priority at any age. Your yearly plan helps you get a step closer to your goal. 

Life Events

Reaching certain milestones are factors that could reshape your financial future. An annual financial plan will help you prepare for events – planned and unplanned. 


An annual financial plan is an essential tool for you to scale efficiently this year. Creating a plan might be time-consuming, but it is usually worth the pain. It would be best to take a step-by-step approach when creating an annual financial plan.