What to include in your January financial health check

A good place to start is with a high-level review of the key components of your financial life. Having everything laid out in one place can give you a reassuring sense of direction as you start to plan. 

• Review your household income, including salaries, bonuses, freelance or side income, and any other regular income flows. If your income has changed recently – or you expect it to – it’s important that the rest of your financial plan reflects this.
• Look at your expenses. Reviewing several months of bank statements can help you understand where your money is going and adjust as needed. Group spending into essentials (such as housing, utilities, food and transport) and discretionary costs (dining out, travel and hobbies).
• Review your savings. This might include your emergency fund, short-term savings accounts, ISAs, pensions and other investments. Are your contributions still suited to your goals and timeframes? Are your savings spread efficiently, including making the most of any tax breaks?
• Take stock of your debt, including mortgages, personal loans, credit cards and student loans. Note the interest rates, repayment terms and balances outstanding. As a general rule, high-interest debt should be your priority for repayment. 

Once you’ve reviewed the basics, January is an ideal time to create or refresh your household budget for the year ahead. A budget should be realistic and help you direct your money towards your top priorities. 

Start by ensuring your essential costs are covered comfortably. Then decide how much you want to allocate towards savings, investments and longer-term goals. It may be a good idea to set aside a dedicated pot of ‘fun money’ so you’re not dipping into your savings each time a treat expense comes up. 

This is also a good opportunity to review your subscriptions and regular payments. Streaming services, gym memberships and apps can quietly add up, and you may not even know what you’re paying for. Many banking apps include a section to manage these regular payments; otherwise, look through your bank statements for any subscriptions you don’t use. 

Financial plans only work when they reflect real life – and life rarely stands still. 

Consider any upcoming life events over the next few years that need to be incorporated into your plan. These might include a wedding, buying or renovating a home, starting a family, changing careers or taking a sabbatical. 

By identifying these milestones early, you can set yourself up to achieve them. If you’re unsure how to define or prioritise these plans, our recent article on setting financial goals gives a simple framework to help turn life ambitions into clear, achievable goals.

Rather than looking at each part of your finances in isolation, cash flow modelling maps your income, spending, savings and investments over time to show how different decisions may play out.  

A financial adviser can run a cashflow model to test scenarios – such as increasing your pension contributions, allocating to higher-risk investments or taking time out of work – and show the potential results. 

Cash flow modelling is particularly useful for long-term planning, as it helps you visualise the impact of your decisions. As your circumstances change, the model should be updated to reflect your new reality.

A January financial health check isn’t about making dramatic changes overnight. Instead, it’s a chance to pause, take stock, and make sure your finances are aligned with where you want to go.

That’s a resolution worth keeping. 

This article is for information purposes only. It is not intended as financial advice. 

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