The end of the year is a good time to step back and do an analysis of your overall financial health and your financial plan. How has your financial picture changed this past year while erasing debt? At the end of the year, in the last week or last few days of the year, review your financial picture to see where you are and evaluate how you are doing.

1. Budget

Take a look over your monthly budgets for the past year. Have they been right on target? Did you miss any big expense that should have been anticipated? Figure out what could have been improved and then make an effort to correct that going forward with the following year’s budget.

2. Spending

Analyze your spending. Did you manage to keep your spending under control? Were there areas where you over-spent and were surprised that you did? What unexpected expenses came up during the year that caught you off guard and unprepared to effectively deal with them? Identify areas of spending that could use improvement and make a plan to adjust differently for those in the new year.

Also identify areas where your spending patterns were well in control. Identify whether these good areas of spending were due to planning in advance or were accidental. If accidental, determine ways to continue these spending patterns on purpose with better planning.

3. Savings

Look at what you saved over the past year. Was it more or less than you expected? Were you surprised by this number? Come up with a savings goal for the following year and plan for this savings by incorporating it into your budget. This may mean setting goals to open a new savings account or a new Money Market Account at your bank. It may require that you increase your 401k contributions at work. Or maybe you have to start it. Set some goals and get going on saving more in the new year.

4. Net Worth

Best of all, review how your net worth has changed over the past year. Has your net worth increased? Hopefully it has. Has it increased dramatically? Meaning has it gone up a lot more than you expected? If so, congratulations, you are making great progress. If it has gone down, then try to figure out why and make corrections where appropriate. Use the analysis of your net worth as a gauge on how well you are doing and to help grade the progress you have made over the last year.

So at the end of the year, analyze how your financial picture has changed over the past year. Hopefully for the better. Erase debt and build wealth.

The 2008 financial crisis was hard on everyone. How far have you come? It’s been 5 years since the 2008 financial crisis. Lehman went bankrupt. Stocks were down big. Home prices were down between 10-20%. 2.6 million people lost their jobs.

Fidelity did a really cool study 5 years later. They surveyed 1100 adult investors and asked them what they do differently.

So how do you think about money today vs. 5 years ago?

Here are the findings of the survey. Plus I’m including my 2 cents along with some financial tips as well…

42% of adults have increased their contribution rates to their retirement accounts or IRA.Do you feel like you are behind on your savings? The easiest way to increase your savings amount is to just do it. Then set it up on an automatic basis. Pick a monthly savings # that works for you, and set it up electronically. Pay yourself first.

55% of the people surveyed feel better about their retirement plan than they felt before the 2008 financial crisis.Why? They have actually done some retirement planning!

My guess is that they also feel better because they have sought out some professional help, and gotten clarity on what they need to do to fund a retirement lifestyle that works for them.

They know how much they have to save every month. They most likely have a target rate of return that they need to earn on their investments. You need to know this stuff for your retirement plan.

42% of the people surveyed have increased their emergency fund.An emergency fund is where you have money in the bank. In savings. Not invested. For some of you, it might make sense to create an emergency fund before investing, or add to your emergency fund before you continue investing.

So do you have enough money set aside for an emergency? Shoot for 3-6 months of living expenses in a savings account. If you are an entrepreneur, consider having 6 months plus set aside. Why? If your income isn’t steady and predictable, a larger savings account could help you get by.

80% of the adults said they now have a better understanding of their finances than they did before the 2008 financial crisis.That’s huge!! That means 4 out 5 people surveyed took the time to get clearer on what is going on with their money situation. Open up the hood of your financial car. Invest some time into learning. The more you understand, the better the decisions you will be able to make.

72% of the people said they have less debt than they did before the 2008 financial crisis.Be clear on what you can and can’t afford. Most of the time, paying down debt could help you in the long run. The key thing is that you need a debt pay down plan. You need to know where the money will be coming from to pay the debt down, and how much you are going to pay down every month.

Sometimes we have to go through experiences and learn from them. But the key thing is to use what we have learned and take action.

So I am challenging you right here to do one thing to improve your financial life. Whatever it is, take the first step. Do it this week. You will feel so much better about yourself.

Important Disclosures: These blogs are provided for informational and educational purposes only, represents our views as of the date of the posting only, and may change without notice. Some of the information has been obtained from third parties and believed to be reliable, but is not guaranteed. We have not considered any investment objectives or financial situations of any investors and we are not responsible for consequences for any decisions made based on the information in the blogs. There is risk of loss from investing in securities, which varies depending on different types of investments. Forward looking statements are based on assumptions only and no reliance should be placed on such statements. We do not guarantee the accuracy or completeness of the information displayed.