Financial Checkup
A periodic review of all personal financial accounts, goals, and plans to ensure alignment with long-term objectives.
What is Financial Checkup?
A financial checkup is a structured review of a person's or household's complete financial picture, typically performed annually or after major life events such as marriage, job change, birth of a child, or inheritance. A thorough checkup covers net worth tracking, budget versus actual spending, emergency fund adequacy (typically 3–6 months of expenses), retirement account contribution rates, insurance coverage levels, beneficiary designations, debt balances and interest rates, and investment portfolio allocation. Just as an annual physical detects health issues before they become crises, a financial checkup identifies gaps — such as underinsurance, excessive lifestyle inflation, or retirement contribution shortfalls — while there is still time to course-correct.
Example
A 40-year-old runs an annual financial checkup and finds: emergency fund covers only 2 months of expenses (target: 6), 401(k) contribution rate is 6% but matching stops at 4% (leaving the full match uncaptured is fine, but retirement projections show a gap), life insurance coverage equals only 3x income (rule of thumb is 10x for dependents), and a forgotten IRA rollover from a prior employer is sitting in cash. Each finding becomes a specific action item for the coming year.
Source: Consumer Financial Protection Bureau — Financial Planning