Why Experts Recommend Regular Financial Audits After New Year’s

A new year generally implies a fresh start in all areas of life. And it’s likely a time you’ll be re-evaluating your finances. But staying on track of your money shouldn’t be a one-time thing.

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“Starting the year with a financial audit or check-in gives you a clean slate,” said Andrew Gosselin, CPA, personal finance expert and senior contributor at Coupon Mister. “It’s a way to stop guessing and start understanding exactly where your money is going. Small mistakes, forgotten expenses or overlooked income can easily slip through the cracks if you’re not paying attention. Catching those early makes managing everything else easier.”

Below are the top reasons experts recommend regular financial audits.

They Give You Clarity

It’s not just about fixing errors, said Gosselin, it’s about clarity. “When the numbers are right, making decisions feels less like a gamble.”

Whether it’s cutting back on spending, saving more or investing, he said it’s all easier when you know what you’re working with.

Gosselin added that looking at your finances also highlights waste. “There’s usually something dragging you down that you didn’t even realize. Maybe it’s a service you don’t use anymore, or money slipping away in small, unnecessary expenses. You don’t notice these things until you take the time to review everything.”

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Audits Also Tighten Up Security

When people know their finances are being checked regularly, they’re less likely to cut corners, said Gosselin.

“It’s a built-in accountability check,” he explained. “Plus, it’s better to spot vulnerabilities before they turn into real problems.”

They Help You Plan

If you don’t understand your finances as they are, it’s hard to set real goals, Gosselin said.

“Whether it’s growing a business, saving for something big or just staying ahead, it all depends on having accurate, updated information,” he added.

Audits Help Prepare for Taxes

“Taxes become a lot less painful,” said Gosselin. “Everything’s already in order, so filing is faster, more accurate, and you’re less likely to miss out on deductions or credits.”

He noted it’s one less thing to stress about when deadlines roll around. “A financial check-in is about control. It’s knowing what’s working, what’s not and what needs to change. It’s not complicated — it’s just necessary.”

Max Avery, chief business development officer at Syndicately, agreed that regular audits helped in identifying tax-deferred opportunities. “I would point out that the January audit may uncover missed opportunities to contribute to tax-advantaged accounts before the previous year’s deadline, such as IRAs or HSAs.”

He noted that taking immediate action can maximize these contributions, reducing taxable income and boosting savings. “For instance, if you didn’t contribute the maximum amount to your IRA or HSA, you can still do so before April 15 and potentially save on taxes.”

He said this is the biggest reason experts strongly recommend conducting regular audits after the New Year to ensure all tax-deferred opportunities are taken advantage of.

They Help You Track Inflation’s Impact on Spending

“In my expert opinion, it is essential to review your budget and adjust accordingly, as prices of goods and services tend to rise every year,” Avery explained. He cited the statistic from the Bureau of Labor Statistics that inflation has averaged around 3% per year over the past 10 years.

Avery said an audit post-New Year helps track inflation’s effect on household budgets with its influence on prices. “I suggest making adjustments to keep spending in check and allocate funds more efficiently by analyzing categories like groceries and utilities.”

He said this will also help you identify potential areas where you might be overspending and find ways to cut back before it becomes a significant issue, such as accumulating credit card debt.

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This article originally appeared on GOBankingRates.com: Why Experts Recommend Regular Financial Audits After New Year’s

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