INVESTOR PLUS

An Annual Review of Your FinancesAn Annual Review of Your Finances

Follow these six steps and make any necessary adjustments. Doing so will help you stay on course toward your financial objectives.

A comprehensive assessment of your financial plan will enable you to see how far you've come toward reaching your goals. You'll need to ask yourself some basic questions, then determine whether the actions you' re currently taking still align with those goals.

Taking a Holistic View of Financial Planning

You probably have a variety of investment accounts to meet specific financial goals, such as a 401(k) plan for your retirement and a 529 plan for your child's college education. But those accounts aren't independent of each other. Investing additional assets into your child's college fund means you're putting less toward your retirement savings goal. And buying a new car every few years may mean you have less cash available for other spending priorities, such as family vacations. "To ensure you are making the best decisions, you should step back and take a holistic view of your financial plan," says Stuart Ritter, CFP®, a senior financial planner with T. Rowe Price. Every financial decision requires a trade-off. But with a clear understanding of what you hope to achieve with your money, you can ensure your spending and investment strategies help support your goals.

  • Write down all your financial objectives, ranking them according to importance. Include when you want to meet each goal and its projected cost.
  • Review your budget to identify areas where your spending does not reflect your personal priorities.
  • Realign your spending plan and reallocate dollars into investment accounts that better reflect your goals.
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ILLUSTRATION BY CURTIS PARKER
1 Moving all or some of the assets in your Traditional IRA to a Roth IRA may provide you with greater financial flexibility.
2 Stuart Ritter, CFP®, a senior financial planner with T. Rowe Price, explains how short-term investments can help stabilize your portfolio.
3 Dan Shackelford, portfolio manager of the T. Rowe Price New Income Fund (PRCIX), focuses on maintaining stability and maximizing current income.
4 The T. Rowe Price Spectrum International Fund (PSILX) invests in up to 13 T. Rowe Price international funds
5 A systematic approach to investing can help you reach your goals.
6 The sector includes a variety of commercial investments—and has performed well against inflation and the stock market.
7 Managing Savings and Income Through the Circumstances of Your Life
8 Stay Informed With T. Rowe Price Insights
9 Estate planning can help ensure that your investments and possessions will be distributed according to your wishes after you pass away.
10 Manufacturing objects on demand is not a fantasy—it's a revolutionary technology that may soon alter the consumer experience.
11 Growing Opportunities in Developed and Emerging Markets.
12 Options for Your Former Workplace Retirement Plan Asset.
12 Detecting and correcting portfolio overlap can help reduce volatility in your portfolio and potentially increase returns.