How to Perform a Personal Finance Audit

How to Perform a Personal Finance Audit

Just like the seasons, your finances are going to change, and it can sometimes feel as though they’re not entirely within your control. Fortunately, a personal finance audit can empower you to manage your money more effectively and break bad habits that have been holding you back.

Why Perform a Personal Finance Audit?

Personal finance audits are a good way to get an overview of your financial situation, allowing you to track your spending, saving, and investment goals. An audit shouldn’t make you panic or feel anxious about your financial situation, but rather allow you to objectively view your finances and even congratulate yourself in areas where you’ve done well.

By gaining a thorough understanding of your finances, you can make smarter decisions, assess the areas in which you can improve, and plan for expenses far in advance.

How Often Should You Do a Personal Finance Audit?

Regardless of your situation, it’s a smart idea to perform a personal finance audit at least once a year. The end of the year is a great time to do an audit so you can get plans and goals in place for the following year.

If you find there’s a regular strain on your finances or you’ve recently undergone a financial hardship, you may want to consider auditing more frequently. A quarterly audit may be the most beneficial.

How to Perform a Personal Finance Audit

Performing a personal finance audit is a relatively quick and painless process. Make sure to cover these areas

1. Review Your Records and Spending Habits

While performing a personal finance audit, you must have access to all of your financial records. A holistic financial audit includes organizing and analyzing the following:

  • Checking accounts. Are you able to make ends meet using just the funds in your checking account? Do you have enough of a cushion to pay for any small, unexpected expenses without dipping into your savings?
  • Credit cards. Are you paying your card off in full each month? Or have you gotten into the habit of carrying a balance on your credit card? It’s ideal to pay off your credit card in full every month so you don’t pay more in interest.
  • Bills. Divide your bills into two categories – fixed and variable. If they’re fixed, that means you pay the same amount each month. If they’re variable, the amount can change month to month. To get an idea of what to budget for variable expenses going forward, add up your bills from the previous 12 months and divide by 12 to get the average cost. If you’re finding that some costs are too high, consider shopping around to find lower rates for your Internet, cable, phone, and insurance.
  • Loans. Track the progress you’ve made on your student loans, mortgage, personal loans, and auto loans. If you’ve consistently paid your bills on time, you may be able to bring down your interest rates or shop around for a better deal. If you’re carrying high-interest debt, for example, you may be able to save by using a balance transfer.
  • Savings accounts. Are you on track to meet your savings goals? Now’s the time to consider setting recurring saving goals for expenses such as education or a down payment on a vehicle or home.
  • Emergency fund. Can your emergency fund cover several months of expenses? Have unexpected expenses eaten into your emergency fund? Can you spare some money every month to get your fund started or build it back up?
  • Investment accounts. Do you have a trusted financial advisor? If not, find one that you’re comfortable working with. If so, make sure you’re checking in regularly to ensure your investments are on track to meet your goals.
  • Credit score. Your credit score is an important indicator of your financial health and has the power to save you money on future loans and lines of credit. Request one free credit report from each of the credit bureaus every year at, and review it for accuracy.

2. Plan for the Future

Every life stage calls for a different approach to budgeting and financing. Earlier in life, you may find yourself financing vehicle costs or your education. Later on, you may find yourself prioritizing retirement. Here are some of the most common future expenses to plan for.

  • Emergency fund. If you don’t already have an emergency fund, now’s the time to start one.
  • Home. If you’re hoping to buy a home, a larger down payment may help you secure a loan or be a more competitive buyer in the marketplace.
  • Weddings. From a venue to a honeymoon, you may want to start saving for your wedding shortly after getting engaged.
  • New child. The arrival of a new child brings a variety of expenses.
  • Retirement. Saving for retirement is one of the most important investments you’ll make over your lifetime. The earlier you start, the more interest or dividends you’ll accrue.

Prepare for the Future with Our Founder’s Card

If you’ve performed a financial audit and you’re ready to start saving, our Founder’s Card can help you on your way. You’ll earn 2%* or 1.5% cash rewards on every purchase you make, and unlike other cards, there are no category restrictions, no annual fees, and no expiration on rewards. Learn more and apply today.


*You can earn 1.5% cash rewards on purchases. You can earn 2% cash rewards on purchases if you maintain a PSECU checking account and qualifying monthly direct deposit(s) of at least $500. See the Visa® Founder’s Card and Visa® Alumni Rewards Card Rewards Program Terms and Conditions for full details.

The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Some products not offered by PSECU. PSECU does not endorse any third parties, including, but not limited to, referenced individuals, companies, organizations, products, blogs, or websites. PSECU does not warrant any advice provided by third parties. PSECU does not guarantee the accuracy or completeness of the information provided by third parties. PSECU recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions.