RTW Universalby David Suzana

Wealth ·

Financial Health Check: An Annual Habit That Brings You Closer to Financial Freedom

An easy, repeatable yearly review to build stability, confidence, and wealth over time

Free: the Financial Independence Starter Kit, a net worth tracker and FIRE calculator that show where you stand and when work could become optional.

Photo by Towfiqu barbhuiya on Unsplash

Just like we schedule physical checkups to stay healthy, we should also run regular financial health checks.

Money stress rarely comes from one big mistake. It usually comes from small things left unchecked for too long. Doing a simple annual financial review helps ensure you have the security, stability, and flexibility you’ll need — especially as life changes and you get older.

“Beware of little expenses. A small leak will sink a great ship.”— Benjamin Franklin

A financial health check isn’t about perfection. It’s about awareness, course correction, and steady progress.

Why an Annual Financial Check Matters

At least once a year, it’s worth stepping back and asking:  Am I still on track?  Do my financial habits support the life I want?

Small adjustments made early compound over time. Waiting too long often makes fixes harder and more expensive.

Your Financial Health Checklist

1) Are You Getting the Full 401(k) Match?

If your employer offers a match, this should be your first priority — it’s free money.

If your finances allow it, consider gradually increasing your contribution until you reach the maximum.  For 2026, the limits are:

  • $24,500 standard contribution

  • +$8,000 catch-up for age 50+

  • +$11,250 “super” catch-up for ages 60–63

If you’re in a lower tax bracket and your employer offers it, a Roth 401(k) can be a powerful option.

2) Are You Maximizing Your Roth IRA?

If you qualify based on income, aim to contribute the maximum directly.  If your income is too high, consider the backdoor Roth strategy.

Tax-free growth and withdrawals later in life can be a major advantage.

3) Are You Paying Credit Cards in Full Every Month?

Carrying a balance means paying high interest for yesterday’s purchases.  Paying the statement balance in full protects your cash flow and your peace of mind.

4) Do You Have an Emergency Fund?

Life happens — job changes, medical issues, unexpected expenses.  An emergency fund gives you options, not panic.

5) Are You Monitoring Your Credit Score?

Photo by Online Marketing on Unsplash

Your credit score affects:

  • Loan interest rates

  • Insurance premiums

  • Even job opportunities in some industries

Improving it over time can save you thousands.

6) Are You Using an HSA (If Eligible)?

If you have a high-deductible health plan, an HSA is one of the most tax-efficient accounts available:

  • Tax-deductible contributions

  • Tax-free growth

  • Tax-free withdrawals for qualified medical expenses

7) Do You Have Low-Risk Funds for Short-Term Needs?

Consider keeping 3 months to 2 years of living expenses in cash or low-risk investments. Start with 3 months and gradually increase it every year.  This protects you from selling long-term investments at the wrong time.

8) Are You Investing Extra Cash in a Brokerage Account?

After covering expenses and tax-advantaged accounts, investing excess cash and bonuses in a regular brokerage account helps accelerate wealth building.

The Bigger Picture

“You don’t have to be great to start, but you have to start to be great.”— Zig Ziglar

Financial independence isn’t built in a year — it’s built through consistent habits, reviewed and refined over time.

By running this financial health check regularly, you give yourself the chance to make small, timely decisions that compound into long-term freedom.

Not perfect.  Just better than last year.

Towards Finance

Thank you for being part of the TF community.

← All writing