The 7 Money Questions You Absolutely Need to Ask Yourself Every Year. No Excuses!

The end of a year always serves as a good reminder that it’s in a person’s best interest to continually review their finances and establish new monetary goals. Regardless of whether or not your budget appears to already in be good shape, here are the money questions you need to be asking yourself in 2016 – no excuses!

1. Do I Have Too Much Debt?

If you are not paying off your credit cards each month, then you have too much debt. You are living beyond your means and losing hard-earned dollars to interest. Before you do anything else, you may want to pay off existing balances so that your money can be working for you instead of against you.

2. Do I Have Enough Set Aside for an Emergency?

The minimum you should have set aside in liquid reserves should be six months of living expenses. Were you to become disabled, this amount will usually cover your expenses until disability insurance or Social Security disability comes through. If you are self-employed, you should have at least 12 month’s living expenses in savings since there is more risk for an economic disaster.

3. Is My Family Protected?

If your family depends on your income to live, then you most likely need life insurance. As a Certified Financial Planner, I often recommend my clients utilize a very simple calculation to determine how much they might need: Multiply your annual income by 20 and then subtract both the amount you have in savings and your current life insurance.

This amount is typically enough to replace your income indefinitely in the event of a tragedy, so long as you can earn 5% on the proceeds. So, for instance, if you make $50,000 and you have $75,000 in investments and $100,000 in existing life insurance, you should consider adding $825,000 more of life insurance, per the aforementioned formula. You may want to consider purchasing a term policy in order to get the highest benefit for the premiums charged.

4. Am I Protected?

If you were to become disabled, not only would you lose your income, but your medical expenses will also rise at the same time. If your employer offers group disability insurance, then you may want to jump at the chance to enroll. Otherwise, you could consider purchasing an individual policy. These are fairly expensive but if you become disabled, it can be a valuable asset.

5. Am I Saving Enough for Retirement?

It is no secret that Americans are not saving enough for retirement. And with a Social Security System that is stressed, you really can’t depend on anyone else but yourself to foot the bill for your happy golden years. It’s generally a good idea to be saving at least 15% of your gross pay for retirement. While that is not an easy number to achieve, you should start somewhere. The absolute minimum anyone should save is the amount your employer matches in your retirement plan. You can then move your savings up by 2% each year until you reach the 15% threshold.

6. Am I Overpaying for Services?

You may want to compare prices on your cellphone, Internet and television providers. These services often offer a discount for signing up, which expires several months later. You can call your providers and ask for the discount to be extended. If they don’t want to do so, you can simply switch to a provider who will offer a discount. You may also be paying too much for insurance coverage, including auto, homeowners and health. Rates can vary widely amongst insurers so comparison-shopping almost always pays off.

You may want to check your credit too since a good credit score could entitle you to better rates on these and other services. You can view your two free credit scores each month on Credit.com.

7. Am I Giving Enough?

Once you have answered all of the questions that relate to your financial health, consider giving back. Not only is it emotionally rewarding, but also there could be tax benefits. If you make gifts to a qualified charity, the donation may be deductible on your tax return as an itemized deduction. In order to deduct the expense for this year, the gift must be completed by Dec. 31.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.