The end of a year – and the beginning of a new one – is the perfect time to review and reflect on what went right for you financially this year, and how you plan to end the coming year even richer.

If this past year didn’t go your way financially, this exercise may sting a little. But it’s all the more important, to help you chart a clearer course for the new year.

There’s an old saying in business: That which gets measured, gets done. Here are five financial measurements to review at the end of the year, along with actionable steps to plan for greater success and wealth this time next year.

1. Net Worth

Because your net worth is the grand total of all your assets and liabilities, and therefore a yardstick for your personal wealth, it’s the perfect starting place.

What is your current net worth? What was it this time last year? What was the year-over-year gain (or loss) in percentage?

Net worth is useful as a big-picture snapshot of your personal wealth, but it doesn’t tell you everything. For example, if you suffered paper losses such as a decline in the value of your stock portfolio due to market losses, don’t fret. As long as the underlying investments are fundamentally sound, and you aren’t forced to sell for a personal emergency, you can weather a stock correction.

The inverse is also true: if your net worth is higher this year only because your home appreciated in value, and you invested no money elsewhere, it may be a false sense of accomplishment.

The more attention you pay to your net worth, the more likely you are to invest money (and education!) in growing it. To easily and automatically track your net worth, create a free account with You can connect your other financial accounts to it, including your savings, checking, and brokerage accounts, plus your mortgage(s). You can also enter your real estate addresses, and it will automatically track estimated values through Zillow.

Mint will then email you snapshots every week, to keep your net worth front-of-mind.

2. Active Income

What is your current household active income?

By active income, I mean your take-home income from your day job, plus any side hustles you’re operating. In other words, income that you work to earn, trading your time for money.

Compare your current active income with your active income from last year. Has your income risen? Fallen? What changed?

Most importantly, what can you do in the coming months to raise your active income further?

Depending on how you earn money, the most obvious answer is often “work more hours.” But there are only so many workable hours in any given month, and each extra hour comes at a cost to your personal life and family.

Instead, look for ways you can increase your effective hourly rate. Would additional education help? A new certification? Perhaps a new job entirely?

Sit down with a blank piece of paper and brainstorm as many ideas as you possibly can for increasing your effective hourly rate. Don’t worry about which ideas are impractical or seem “stupid” – the more ideas you write down, the more likely you are to move beyond the obvious and come up with truly original and brilliant ideas.

The more income you can generate, the faster you can build true wealth.

3. Investment (Passive) Income

Passive income generated from investments is the holy grail in personal finance. It’s how you reach financial independence, how you can retire, regardless of your age.

Ultimately, your long-term financial goal is to replace your active income with passive income. It won’t happen overnight; in the best-case scenario it takes years. For most people, it takes many decades.

What is your average monthly income from investments? It could come from dividends, or from rental properties; from bonds, or from private notes. In a balanced investment portfolio, it will come from several of these, and perhaps from alternative sources like royalties, crowdfunding websites, or peer-to-peer loans.

Wherever it comes from, you need to measure it, and compare it to your passive income this time last year. Over the coming year, part of your mission will be to raise this investment income by as much as possible.

4. Emergency Fund

Personal finance experts run the gamut of opinions on how much cash you should keep in an emergency fund. Some more aggressive investors (like myself) maintain that only one or two months’ worth of expenses is enough, so long as you have backup sources of funds (such as credit cards or a HELOC) that you can lean on in a true emergency.

Other more conservative writers (like Dave Ramsey) argue that you should put aside six months’ or even a year’s worth of expenses in a cash emergency fund. I don’t like the opportunity cost of having so much cash sitting around and losing value to inflation, but I understand the logic: when a true emergency strikes, you need money, and you need it fast.

How much do you have set aside as a cash cushion in your emergency fund? How many months’ worth of expenses can it cover?

How does it compare to last year?

If you don’t have at least one month’s worth of expenses set aside in cash, now is a good time to prioritize savings.

5. Savings Rate

To me, few metrics are as important as savings rate.

The people who save the highest percentage of their income will reach financial independence and retirement fastest. If you want to build wealth, the most effective way to do it is by increasing your savings rate and putting that money to work for you generating passive income.

What percentage of your income did you put aside in savings or investments this year? How does it compare to your savings rate last year?

Growing Your Wealth Next Year

If you want to end next year significantly wealthier than you’ve ended this past year, here are a few action steps to take.

First, look for ways to expand that gap between what you spend and what you earn. Cut your spending on dinners out, new clothes, new gadgets. And don’t stop there: put every expense in your budget under the microscope, and ask if you really, truly need to spend so much there. For example, the average American spends over $100 every month ($1,200/year!) on cable TV.

Why not switch to Netflix for $7.99/month and save over 92% on your TV entertainment? Take a machete to your budget and start hacking.

With the extra savings, build an emergency fund of at least one month’s expenses. Then start investing your monthly savings for either high income returns (investments such as rental properties) or for high growth (such as stock index funds). If you’re new to investing, start with index funds – they’re simple, cheap, and require virtually no work from you. Begin with a fund that tracks the S&P 500, a fund that tracks the Russell 2000, and an international index fund or two.

Then, look for ways to increase your active income, to grow your savings rate even more. Pick the best idea from your brainstorming session and run with it.

Finally, start automatically tracking your net worth. Building wealth isn’t complicated, but it does take discipline!

Eyes on the Prize

Have you calculated how much you’ll need to retire yet? Your target nest egg?

That’s the prize number. If you don’t know your target nest egg, you can quickly calculate it using our Choosing Wealth calculator.

The sixth and most important financial number is the wealth distance left to travel, the gap between your current net worth and your target nest egg. If your retirement target is a million dollars, and your current net worth is $200,000, then you have $800,000 to go.

As you wrap up your financial review for this year and your planning for next year, keep that figure in mind as the big picture. And remember: the higher your savings rate, the faster you’ll get there, even if the distance seems impossibly far at this moment.

Take the action steps above, and this time next year you’ll be significantly closer to your target wealth.