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If the thought of doing a yearly financial review makes you sigh, procrastinate or immediately feel tired, I get it. 

It feels tedious, maybe even stressful. And after a long year of hustling at work, the last thing anyone wants is "more administrative work".

But having announced to everyone that I wanted to achieve financial freedom and retire before I turn 45, I knew I needed to review my finances every year to reach my goals, especially now that I'm already in my 30s. 

That's why every December, I make sure to carve out a quiet pocket of time to sit down for an annual audit of my own finances. 

Over the years, this practice has saved me from repeating certain financial mistakes and helped me catch hidden warning signs early. It gives me much-needed clarity and helps me plan for the year ahead. 

REVIEW YOUR EXPENSES WITH HONESTY, NOT SHAME  

Our emotions around money matter more than most people realise. They offer clues on where our financial systems need strengthening.

So take this time to think about how your finances made you feel this year. Think back on the past 12 months: Did your finances feel stable or shaky? Were there periods of anxiety? Did you generally feel in control of your money, or were you constantly scrambling to react and running out of cash?

I'll admit I've had year-end reviews where I stared at certain transactions and thought: "Why did I spend S$2,000 on food delivery?!" or "How did I forget to cancel or use this subscription for nine months?"

But instead of beating myself up, I remind myself that this review is about data, not judgment. 

You can easily pull up your expenses by exporting your bank or card statements for the year (most banking apps let you do this in seconds), then pull up your spending categories and see where your money went for this year. These days, you can also easily use artificial intelligence tools to sort it out for you in minutes.

This will show you where you overspent, which expenses were totally worth it and what you might want to cut down on next year.

Then ask yourself: When it comes to money, what emotions kept showing up for me throughout the year? 

For instance, guilt could be a sign that your budget is unrealistic for your lifestyle, or that your spending habits don't match what you earn or truly value. On the other hand, confusion may be the clearest signal that things need to be simplified – fewer accounts, fewer apps, fewer moving parts.

This emotional check-in gives me a sense of direction before a single spreadsheet is opened.

FACE YOUR FAILURES, FOCUS ON THE LESSONS

Many of us make financial resolutions every January, only to reach December and realise that nothing happened. 

A year-end review is the perfect opportunity to face your failures – not to berate or guilt yourself, but to figure out exactly what friction was holding you back from moving forward. Otherwise, it can be difficult to choose a strategy to overcome it.

As an investor, is crucial to growth – and this involves doing the difficult yet valuable work of examining your behaviour throughout the year. During my financial review, I'll reflect on the lessons from my investing decisions and outcomes this year. 

Did I stick to the plan I had at the start of the year, or did I let my emotions take over? Did I panic sell during a dip? Did I chase a piece of hype and regret it later? 

For instance, my 2020 review made me realise that I regretted being too conservative with my cash during the COVID-19 market crash, so I resolved to be more decisive the next time the market fell. 

This insight helped me take more decisive actions amid market declines in 2022 and again in April 2025, and the stocks I added have since doubled and tripled in value.

I also review my performance against the broader market that year to check whether my results (or lack thereof) were due to my skills or simply a reflection of market conditions. 

For instance, in 2022, my portfolio underperformed – but so did the rest of the market. And in 2024, when almost all assets (except bonds) surged, my gains increased as well, but that does not mean my returns for that year were due to me being "better" than I was in 2022. 

Some of the most valuable investing lessons I've learnt didn't come from gains I made, but rather from decisions I regretted – such as failing to invest more in a position I believed in or not averaging down my cost when the chance arose.  

These insights often form the foundation for better investing habits and decisions the following year.

DESIGN AN ACTION PLAN TO MOVE FORWARD

You'll be surprised by how much you can find out in your own annual financial review, and this is where reflection turns into action. 

There was one year when I spent most of the year worrying about losing my job. Only during my year-end review did I realise that I had been relying too much on a single source of income. 

To ease that anxiety, I took steps included building up my emergency fund, upskilling to stay competitive, and even starting a small side hustle for supplementary income. Even a small freelance gig can soften the fear of losing a pay cheque.

Another example is insurance, an area many people overlook until something goes wrong. But each December, I deliberately review all my policies – because risks and life circumstances change, and increasingly, so do premiums.

This was what helped me realise a few years ago that my Integrated Shield Plan (IP) premiums seemed to be rising faster than I'd expected. After seeing this trend appear again in a couple more reviews, I realised it wasn't just me.

Turns out the culprit was rider premiums, which climbed 17.2 per cent per year (between December 2021 and 2024) – double the 8.6 per cent annual growth in private IP premiums over the same period. 

By catching this in my annual review, I then told my husband, and we decided to downgrade our own coverage at the start of 2025.

Your annual review may help you notice things you wouldn't have otherwise and develop a plan to address them.

NOT A CHORE, BUT A GIFT TO YOUR FUTURE SELF 

While New Year's resolutions excite people, they often dread year-end reviews, but it doesn't have to be a burden. 

My annual financial review has become a quiet act of care – a chance to check whether my systems still adequately support my life. Perfection isn't the goal; progress is.

This habit once helped me catch a surprising gap. Although I was saving and investing regularly, I had never budgeted for big family expenses, such as school fees, enrichment classes, birthdays and festive spending. As a result, those costs kept catching me off guard, and I was scrambling each time. 

Once I spotted that pattern, I set up separate buckets for predictable expenses. The next year felt far less stressful because I finally had a system that reflected my real life.

Not every gap is urgent. Sometimes it's just a subtle sign your financial system needs a tweak. Spotting them early means you can adjust the system before the gaps balloon into bigger problems.

Instead of treating our year-end review as yet another problem to solve, try to see it as a tool for awareness and alignment. It shouldn't be about creating more worries, but rather about giving us the reassurance we need to step into the new year with confidence and ease.

Dawn Cher, also known as SG Budget Babe, is the author of Take Back Control of Your Money. She has been running a popular blog on personal finance for the last 10 years.