When we ask a client if they’ve performed a financial review recently, we’re often met with a blank stare or an answer along the lines of, “Sure, we review our budget every month.” The truth is a financial review is very different than reviewing your budget monthly.

Performing a financial review is an intentional, comprehensive effort that will help you understand your current financial state and develop insight into any changes or adjustments you may need to make. Regularly checking in on income, debts, investments and financial obligations can help you develop a clearer picture of where you stand and help alleviate financial stressors.

Financial reviews are particularly critical as you approach retirement. By examining your current practices and working in adjustments such as making catch-up contributions to your 401(k) or IRA, you can be better positioned to meet your retirement savings goals. 

If you’d like to meet with a professional, most banks offer complimentary financial reviews – but it’s also possible to do a financial review on your own. Here’s how:

Evaluate your current situation

Kristine Batch is senior vice president, senior regional delivery manager, personal banking, at UMB Bank.

Tracking down and recording all of your income, holdings and recurring debt is the foundation of a financial review. Start by taking note of income – be sure to include your salary, any second jobs, annuities and other sources of money coming in. 

You also need to tally up all of your expenses. This can be more time-consuming, as everything from your rent or mortgage to the $10 you pay each month for a streaming service qualifies. If you use a single credit card or bank account to pay for everything, you can review a statement to find most of your regular expenses. From there, you can find an average for variable costs, like groceries, and any bills that may be due less frequently, such as some quarterly or annual car insurance payments. Remember to include any debt and the associated interest rate, whether it comes from credit cards, loans or another source.

As you review what you’re currently earning and spending, be sure to take a close look at what you’re contributing to retirement savings and other investment vehicles. While these contributions are currently expenses, they will pay off as income down the road.

Build a budget

As you gather information about your income, assets and expenses, you can start to identify area you can afford to reduce your spending. Then strategically earmark these funds or items like increasing retirement investing, paying down debt and building an emergency fund. When it comes to retirement investing and saving, be sure you’re contributing at least enough to meet an employer match, if you have one. You may also consider setting money aside for a personal “reward” purchase like a vacation or new TV.

Once you see the whole picture, you can then build a budget. Your budget should itemize a dollar amount for each planned expense and should be realistic. You should also use a tool to track how well you’re sticking to your budget. This can be a pencil-and-paper ledger, spreadsheet or one of the many budgeting apps that are available. 

Create long-term goals

A financial review doesn’t just help by enabling you to create a balanced, sustainable budget – although that’s a major benefit. It also helps you create long-term goals that are manageable, sustainable and positive. Your financial review will help you understand where you should specifically direct your efforts to pay down debt, increase retirement savings and shore up your overall financial security.

With a complete assessment in hand, you can identify the highest interest rate you pay among your debts, for example, and dedicate more funds to paying off the principal as early as possible. You may also identify some room for riskier investments in your portfolio, or the need to ramp up retirement investments now to reap the rewards later on.

Regularly re-evaluate

Long-term planning is vital, but it’s important to remember that situations can always change, which is why it’s important to do a financial review bi-annually – one on your own and one with a financial advisor or banker. If your financial review reveals a tight budget that doesn’t provide enough room for long-term savings or investment, you can start making small and large changes – from cutting down on eating out to finding a higher-paying job – that will help rectify the situation.

Financial reviews are critical in helping you understand where you currently are financially and how you can get to where you want to be. If you do them regularly now, your future self will thank you for the help in achieving financial success.


Kristine Batch is senior vice president, senior regional delivery manager, personal banking, at UMB Bank. She can be reached at Kristine.batch@umb.com