To see the best way forward, sometimes it’s important to look backward. Reflecting on your financial history thus far can yield some interesting insights into how to set your financial goals for the year. Let’s talk a little more about why this is an important practice, and then get into the process!

Why Reflect?

Reflecting on your financial journey throughout life can yield several important results. First, it can give you a chance to simply notice what’s changed, and how. The last  few years have been economically tumultuous for most of us. Consider where your finances were at in the beginning of the year, as opposed to where they are now.

Aside from noting change over time, this can also be a chance for you to learn from your past money moves. Perhaps this past year you tried some new strategies or made a big purchase. Reflecting on how different events in your financial life this past year have worked out can give you insights into what to do next, and what you’d rather not do again.

Finally, I personally believe that just giving your money the gift of your attention is a positive thing by itself. Simply making it a habit to check in with your money and what it’s doing right now can be enough to start you off. Reflecting and looking at your money history is one way of doing that!

Step One: Try Out Some Prompts

To spur your reflective time, I have a couple different questions you can try asking yourself. These prompts are about your values and your goals, rather than the nitty-gritty details. If you’re more interested in that, scroll down to the review section. You might like to try answering these questions either as journal prompts, or use them as discussion questions with a money buddy:

• How has my financial situation changed over the course of this year? Where am I now compared to December 2020?
• Do I feel fulfilled by how I used my money this year? Why/why not?
• How do I feel about they way I showed up with my money this year?
• What are my financial lessons this year? What did I do with my money that worked so well, I’m going to do it again next year? What would I like to improve on?

Step Two: Review Your Records

Whether you’re reflecting on personal or business finances, you likely have records of your past money moves. Take some time to reflect on these!

If it’s business finances you’re looking at, I highly suggest doing a year-end bookkeeping review. Even if you do it yourself and then get it checked by a pro, this is a great step in the right direction. Done right, this can give you clarity about what aspects of your business are bringing in the most revenue, and what to focus on.

If you’re reflecting on personal finances, or even your financial picture as a whole, it’s good to get clear on your income and expenses at this stage. For more directions on how to do this, I suggest reading my article “How to Create a Spending and Income Plan, Part One” which goes into detail.

Step Three: Do a Full Check-In

If you’re interested in a more lengthy reflection process, I recommend doing a full check-in. My article How to Do a Business Check-In  goes into detail on a process you can use to do this. I can also recommend my article Three Steps to Financial Clarity for a process that’s less business-focused.

If you enjoyed this article, you’d probably like my free e-Book, Reach Your Life Goals: A Business Owner’s Guide. Click here or below to get your copy!