Marriage is a lot like a compelling Netflix series—there are ups, downs, and surprises, and you never know with certainty what’s around the corner. And just like your favorite shows need a seasonal refresh to stay on top of the ratings, so does your marriage—especially when it comes to your joint finances. Enter: the annual financial review. An opportunity to ensure that you and your spouse are on the same page financially, addressing any shifts in income, expenses, or goals. But before you try to exit on this because it sounds like another chore, let’s break it down so you see what a gift it really is.
Why an annual financial review is important for your marriage
Imagine you’re driving down the road, zooming along without ever checking your speed or what’s happening around you. You’d agree that would be pretty risky, right? Well, the same applies to your finances. An annual financial review is the pit stop you and your spouse need to ensure you’re on the right road towards your financial goals. According to a survey by Fidelity, only 55% of couples make financial decisions together, which can lead to miscommunications and unmet expectations. A regular review helps you avoid the “surprise bills” cliffhanger and keeps your financial story compelling and smooth.
What should you be reviewing annually?
An annual financial review isn’t just about dusting off your tax returns. It’s a full-scale audit of your financial landscape. Here’s what you need to include:
- Income and Expenses: Did you switch jobs, get a promotion, or pick up a new side hustle? Or maybe those supposed once-a-week takeout nights have doubled in frequency? It’s time to review and adjust your budget accordingly and see where the leaks are.
- Debts: Look at all your loans, from the mortgage to student loans. Are you closer to being debt-free, or have new debts crept in? Have you stayed on track with repayment deadlines, or have late fees and interest charges been added up?
- Savings and Investments: Check your emergency fund, retirement accounts, and any investments. Are they aligned with your current goals and risk tolerance? Do funds from other sources need to be redirected here?
- Insurance Policies: Life, health, and property insurance—do you have enough of the right coverage, or are you overpaying for policies that no longer fit your lifestyle?
- Estate Planning: Review your will, power of attorney, and any trusts. Life changes and so should your estate plan to reflect that.
- Review your Prenup: Has anything financially drastic changed since your prenup was drafted? For example, did someone start a business when it was not expected, or did someone get an unexpected million-dollar inheritance that was not addressed in the prenup? It may be something to consider.
Regularly updating the above financial aspects of your life together prevents your finances from turning into a plot twist that you didn’t see coming.
A step-by-step guide on reviewing your finances
Feeling a bit overwhelmed? Don’t worry. It’s not as intense as the season finale of Stranger Things. Here’s a step-by-step guide to keep things simple:
Step 1: Set a Money Date: Choose a time when both of you can focus without interruptions—maybe after brunch on a Sunday when the mood is light and tensions clear. Trust me, money dates are game changers for the health of your finances and relationship.
Step 2: Gather Documents: This includes bank statements, bills, tax returns, insurance policies, and investment account summaries. Get everything you need to be able to do a proper review.
Step 3: Review Income and Expenses: Use a budgeting app or a good old spreadsheet for this. Compare your current income and expenses to what you budgeted, and make any necessary adjustments.
Step 4: Check Your Credit Report: Get a free report from the major credit bureaus to ensure there are no surprises or fraudulent activity.
Step 5: Assess Debts: Look at your current debts and see if it’s time to refinance, consolidate, or pay off any balances. Getting ahead of debts is key to financial health, so it doesn’t snowball into overwhelm.
Step 6: Evaluate Investments: Review your investments and ensure they align with your risk tolerance and goals.
Step 7: Review Insurance Coverage: Make sure your life, health, and property insurance still meet your needs and the needs of your family, if relevant.
Step 8: Update Estate Plans or Prenups (if necessary): If there’s been a significant life change (like having kids or buying property), reviewing and potentially updating your will and/or prenup may be necessary. You may need to consult with a lawyer to determine if either of these documents requires updating or if they already provide for the necessary changes.
Why an annual financial review matters for your relationship
Money talk can feel like the “Dreaded Talk” in any relationship – the one everyone avoids. But it’s essential for keeping the peace and avoiding those awkward, tension-filled dinner dates. Your personal relationship with money and how you relate to it with your partner impacts so many aspects of your life, so it’s not an area to avoid.
A 2023 study by the American Psychological Association found that money was one of the top stressors for people, with 82% of 18-34-year-olds and 77% of 35 – 44-year-olds citing money as a main source of stress in their lives. Money is not a topic to avoid, as personal stress influences relationship stress. Regular financial check-ins act like relationship therapy, keeping those small money issues from snowballing into something bigger. Remember Ross and Rachel’s infamous “we were on a break” argument from Friends? Miscommunication can lead to misunderstanding, which is why regular check-ins are crucial, not only in your love life but in your financial life too.
Your financial review toolkit
We live in the digital age, with an app or online tool for nearly everything, including financial planning. Here are a few resources to make your annual financial review as smooth as butter:
- Budgeting Apps: Try YNAB (You Need a Budget) to track income and expenses and adjust budgets in real-time.
- Investment Tools: Consider using platforms like Vanguard’s or Fidelity’s online tools to manage, review, and adjust your investments.
- Debt Management: Apps like Debt Payoff Planner help you strategize paying off loans more efficiently.
- Credit Monitoring: Credit Karma and Experian offer free credit score monitoring and advice for improving your credit.
- Insurance Checkup: PolicyGenius helps you compare insurance policies and find better rates.
- Estate Planning: You can use online tools to build an estate plan or consult a lawyer for more complex needs.
- Prenup Review: If you already have a prenup and have had a significant life or financial change, you will want to speak with a lawyer to understand if you need to make a prenup amendment, revocation, or postnuptial agreement.
The trick is to simplify your financial review by using technology to eliminate the headache of financial planning. This allows you to focus on the more enjoyable parts of life—like deciding what to watch next.
The bottom line on your annual financial review with you partner
An annual financial review might not sound as exciting as a new season of Love Island USA, but it’s just as necessary for a healthy, happy marriage. By taking the time to review and adjust your financial plans together, you ensure that you’re both moving in the same direction (toward your shared dreams and goals). So, set that money date, gather your documents, and turn what could be a mundane task into a positive, proactive step for your relationship. You’ll be grateful you did it. After all, in the long-running series that is marriage, you want every season to be a hit.
Frequently Asked Questions (FAQ) about annual financial reviews
Let’s dig into some questions about reviewing your finances annually with your spouse.
Q: How often should we review our finances?
A: At least quarterly, although monthly reviews are ideal for staying on top of changes.
Q: What if one partner isn’t as interested in financial reviews?
A: Start with a casual discussion. Focus on how these reviews can prevent stress and support your shared goals. Being open about finances is key, so avoid letting this go unaddressed.
Q: We have separate accounts. Should we still do a joint review?
A: Absolutely! Understanding each other’s financial status helps build trust and ensures both partners are working towards common goals.
Q: What if we don’t agree on certain financial decisions?
A: Compromise is key. Consider seeking advice from a financial planner or counselor if you hit a sticking point.
Laura Tynan is the founder of The Witch of Wall Street, a personal finance and investing community, where women are shown how to manage, multiply and manifest money, using simple strategies. Laura holds a BSc Hons in Finance, is a Chartered Accountant, and is certified in EFT Tapping, Breathwork, and RRT. She has been recognized by the Financial Times as a Top 20 Future Female Leader and by Yahoo! Finance as a Global Champion of Women in Business. She is a multi-award-winning speaker who has spoken at, and been featured in, Forbes. Laura hosts The Witch of Wall Street podcast and is the author of the personal finance and investing book for women, by the same name, which is available now on Amazon.
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