Foreclosures and company layoffs are up; the stock market and your 401(k) plan are down. Have you updated your family's financial plan lately? The beginning of the year is a great time to look at your finances and see what changes need to be made. Whether you had a birth, death, marriage or divorce, a promotion or job loss, life presents constant changes and your financial plan should be updated periodically to reflect those changes.

When you go to the doctor for a checkup, you will generally have an examination, receive a diagnosis if problems are found, and obtain a prescription to control the symptoms. Financial checkups are designed to assist you in reviewing your financial status and make changes appropriate to your situation.

Examination

To start, gather all of your financial statements (see the list below). If this information is on a financial software program such as Microsoft Money or Quicken, the process will be a lot easier. These records provide volumes of information on what you have, what you spend, and who you owe. It is important to review these statements for accuracy.

• Financial statements
• Banking (checking and savings)
• Mortgage
• Investment (personal and employer)
• Credit Cards
• Loan (car, personal, etc)
• Insurance (life, home, auto, etc)
• Wills, trusts
• Credit Report
• Paystub, W2, 1099 Misc, etc
• U.S. Income Tax Return

Look at your checking account statements. Pay attention to how much money goes in and what goes out each month. Is any unnecessary spending going on? Are your beneficiaries updated on insurance policies, retirement accounts, wills, trusts, and bank accounts? What is the current rate on your mortgage or auto loan? Is it higher than the current rate available? How are your investments performing? Are your investments spread out over broad sectors, or are you invested in only one or two areas? Is the information on your credit report correct? Do you have any delinquent accounts on your credit report? Did you receive a refund or owe the IRS? After examining your financial statements, it's time to make a diagnosis.

Diagnosis

Look at the chart below for scenarios (symptoms) of common problems and possible reasons (diagnoses) the problem exists.

If none of these symptoms apply to you, then you are well on your way to financial success. If some of these issues are yours, here's a prescription:

Prescription

· Set three attainable goals such as increase savings, decrease spending, reduce debt.

· Make sure you have six to nine months of monthly expenses in an emergency fund.

· Reduce unnecessary spending. Review your budget for areas where spending can be cut (i.e. dining out).

· Eliminate high interest credit card debt. If you have paid your bill on time each month, call and ask your credit card company for a lower rate. Make a plan to pay off debt; sometimes starting with the lower balance is easier than focusing on the higher rate cards that have higher balances.

· Eliminate bank charges; balance your checkbook, pay your bills on time, use your bank's ATM machine instead of incurring fees by using out of network ATMs.

· Investment smaller monthly amounts (dollar cost average) into an account instead of investing large lump sums.

· Diversify your investment portfolio; have future contributions go into a different sector.

· Shop around for better terms /rates on insurance, credit cards, or mortgages.

· Update beneficiary information in cases of birth, marriage or death.

· Make sure wills and trusts have up-to-date information.

· Check the number of personal exemptions you are claiming with your employer. If you find that you have too many or too few exemptions, update your W-4. Check with your tax professional for the number of exemptions you need to claim.

· If mistakes or incorrect information are on your credit report, contact all three credit bureaus to insure that your file is updated. If fraud occurred on your account, have a consumer statement placed on the account, and if warranted, set up your credit profile so that new credit cannot be issued without additional verification.

All problems cannot be solved in one session. Here are some suggestions to use for follow up:

Follow -Up

http://www.bankrate.com

http://www.annualcreditreport.com

http://www.ToughTimes.illinois.edu

http://www.saveandinvest.org