Your New Year Money Checklist

Making sure that your asset allocation is in line with your investment goals is an essential part of managing a portfolio. The beginning of the year is an opportune time to do it, and the process may take only a few minutes.

Whether you use a software program (such as Quicken) or pen and paper, you need to know where your money is going. Break your expenses down into categories—like utilities, insurance, entertainment, and clothing—to identify where you can scale back.

Whether you want to be debt-free in 10 years or own a house in five, you’re more inclined to save if you have specific goals. So write them down and determine how much money you’ll need to save each month to reach them.

Create a regular savings plan. Set up direct deposit from your paycheck into a savings account. You won’t miss money you never see.

You’ll avoid costly missed payments, late fees, and negative marks on your credit score.

Start by paying down bad debts, such as high-interest credit-card bills and non–tax-deductible debt.

If you can’t afford to max out your employer-sponsored 401(k) or SEP plan this year, try to contribute enough to receive the full company match. If you don’t have a retirement plan at work, fund a traditional IRA or a Roth IRA and arrange for contributions to be made automatically from your checking or savings account.

Review all your policies—home owner’s, renter’s, auto, disability, and life insurance. Are the limits adequate? Should the deductibles be raised? Is there a less expensive policy with similar coverage? Are you taking advantage of all the discounts offered to you by your insurance providers?

Get a free copy of your credit report (the numerical summary of how much you owe and how promptly you pay your bills, which is examined by everyone from lenders to landlords) from annualcreditreport.com.

This ensures that your personal belongings, assets, and investments go to the beneficiaries you choose.

Aim to sock away 6 to 12 months’ worth of living expenses so that in the event of an emergency (a job loss, unexpected medical bills), you won’t have to sell assets or rely on credit cards.