Setting new-year goals is a common objective for many folks, but reviewing the year we just lived is often a better use of time to maximize happiness in our lives. Recognizing what provided us joy, and what did not, directs our energy going forward so we can create more positive experiences.
Annual reviews vary significantly from person to person, but I suggest focusing on maximizing happiness rather than only gauging success. Our society has a tendency to focus entirely on achievements, often at the sacrifice of joy or even health. While analyzing where you are on certain journeys of success is important to fulfillment, these benchmarks are not the only ones worth noting.
Before getting into what parts of your year you should assess, how you review 2024 matters as well. Thoughts like “my health could be better” do not lead to concrete improvements. Dig a bit deeper into the specifics of each category you consider to have a greater impact on future years.
How to Assess
Within each category, I first assess the current year in a factual manner. Numbers are great for categories where they exist. (I outline more about what those look like below.) Where numbers do not exist, outline habits and consistent actions to accurately depict your lifestyle as it relates to a certain category.
Once you capture a truthful picture of 2024 for a certain category, consider each point and decide whether your current reality makes you happy. Any detail that makes you 100% happy without adjustment is something you should “keep doing.”
Hopefully, some points fall under “keep doing,” but most will require at least some adjustment. To capture adjustments, use the following scale:
Stop doing and keep doing are self-evident: Something you mark as “stop doing” should have no value to the category you are assessing and also not provide you any net joy. An example may be a habit of scrolling on your phone right before going to sleep. The habit likely gives you anxiety rather than joy, and it negatively impacts your health by decreasing the quality and quantity of your sleep. Keep doing is similarly a habit that you like, that contributes to your happiness, and has a positive impact on your life. A counter example to the phone scrolling habit may be reading for 30 minutes before going to sleep, to relax you and improve sleep quality.
The other three parameters are for those areas in between because most of our actions do not fall into a hard stop or a hard keep category. This is why “do less,” “keep doing, but adjust,” and “do more” exist. For ease of example, we can stick with habits that may impact sleep to assess these categories. A “do less” may be staying up past a certain hour watching a movie. This may have a negative effect on sleep but a positive effect when the whole family can gather to watch a movie together. As a result, an end-of-year assessment may say, “do less,” to indicate that watching a movie past a certain hour is fulfilling only on Friday family movie nights. Alternatively, someone else analyzing this same action may opt for, “keep doing, but adjust,” indicating that they get value out of watching a movie but should move up the start time to prevent interference with their sleep schedule.
The “do more” category is for those actions that we may incorporate sometimes but want to incorporate more or increase consistency around them. The person that sometimes reads before going to sleep, may want to increase this habit to make it a nightly routine, or even a routine on all nights other than Friday family movie night.
If you are someone who prefers setting goals at the start of the new year, these assessments can guide you to those goals. Looking at your actions over the past year illuminates what you actually value to help you shape a goal you actually want to achieve. Alternatively, an annual review can provide more intentionality around the habits that add the most value to your life while you eliminate the ones that diminish your happiness.
Six Areas to Assess
Breaking down your assessment into various categories can help you better focus on the pieces of life that impact your happiness the most. While these categories will not be the same for everyone, there are some relatively consistent categories that impact happiness for most.
Your Wealth
We are a tax and financial services business, so of course we have to start with assessing wealth! Specifically, an annual net worth calculation can help you track your progress towards your retirement goals, whether you are striving for early or regular retirement. Once retired, this check-in can also help you gauge whether you can increase your annual spending or need to decrease it to maintain your principal. If you need help calculating your net worth, use our net worth guide and calculator.
If I had to pick one financial metric to calculate each year, it would be net worth. It gives you a picture of the net outcome of all your efforts investing throughout the year and lets you know if you grew your wealth despite whatever spending that occurred during the year. In most years, net worth provides positive reinforcement for anyone who invests regularly. On the other hand, if your net worth is underwhelming, setting a specific strategy to grow your net worth next year is a terrific goal.
If you look at your net worth and feel happy with your annual growth, this is an ideal category to file under “keep doing” without another thought. If (a) you want to see more growth or (b) know changes are coming that may impact your potential to invest significantly, whether in a positive or negative manner, your investments may be worth shifting. To break this category down further, look at what you are contributing to each account and analyze various accounts like retirement accounts, HSA, high-yield savings accounts, and more according to the scale above.
Your Income Streams
Assessing your income streams will vary based on whether your income comes primarily from a regular job, a business (or businesses), or a combination of the two.
If you work for an employer for your primary income, assessing your income does not just mean looking at your salary and deciding whether you are happy with it. You should look at whether you are happy with your hourly rate. This is a better assessment of whether you are happy with the pay you receive for the amount you actually work.
To calculate your hourly rate, add up all the hours you work in a week plus any time you dedicate to commuting and getting ready for a workday. If you are in an office, it may take you 30 minutes to fix your hair, clothes, and makeup and another 30 minutes to commute each way to work. Even if you stick to an 8-hour workday, that means 9.5 hours are dedicated to work each day, or 47.5 hours/week.
Next, multiply the hours you work in a week by 52. Finally, subtract holidays and the number of days of leave you take in a year. Assuming you take the entire day off when you take leave, make sure to include the full number of hours in your typical workday, including the commute and prep time, when you subtract holidays and leave. However, if you check e-mails from the beach (stop!), that is an hour of work and should be included.
Once you have the total number of hours you work in a year, divide your salary by the hours worked to get your hourly rate. Salary alone does not indicate how much money you make with your time. For example, take these two people with different salaries:
Person 1 has a $100,000 annual salary, keeps to their scheduled 40 hours each week and works remotely, with no commute or prep time to get ready for work. They have 11 federal holidays and unlimited leave, so they took 32 days of leave last year since their goal is to hit 30-35 days of leave a year. The math:
40 hours/week × 52 weeks/year = 2,080 hours/year
To subtract holidays and leave:
11 federal holidays + 32 days of leave = 43 days off
43 days off × 8 hours/day = 344 hours off
2,080 hours scheduled - 344 hours off = 1,736 hours actually worked
Person 1’s hourly rate is:
$100,000 ÷ 1,736 hours = $57.60/hour
Person 2 has a $150,000 annual salary. They work an average of 10 hours a day, have a 45-minute commute each way, and take 30 minutes to get ready for their workday. This means their average hours committed to work are 12 hours/day or 60 hours/week. They also get 11 federal holidays, but they only took 10 days of leave last year because it was a busy year at work. They also checked e-mails and called into meetings for an average of two hours/day on holidays and while on leave. The math:
60 hours/week × 52 weeks = 3,120 hours/year
To subtract holidays and leave:
11 federal holidays + 10 days of leave = 21 days off
12 hours/workday - 2 hours worked on days off = 10 hours per holiday and leave day
21 days off × 10 hours/day = 210 hours off
3,120 hours - 210 hours = 2,910 hours actually worked
Person 2’s hourly rate is:
$150,000 ÷ 2,910 hours = $51.55
Person 1 makes more money per hour than Person 2 despite making $50,000 less a year. Additionally, this only considers time: Person 2’s hourly wage is even lower when considering the costs of commuting and maintaining a professional wardrobe. If I were Person 1, I would likely be happy with that hourly rate, but I would not be happy as Person 2. Once you calculate your hourly rate, you can use the scale above to assess whether you are happy and feel valued based on the hourly rate you calculate. Shifting this hourly rate does not always mean getting a new job: Person 2 could increase their hourly rate by working from home a couple times a week, moving closer to work, reducing the number of hours they work in a day, taking more leave, and/or staying off e-mail during holidays and leave days.
If you are living a lifestyle more like Person 1, you may need to find a higher-paying job if you still find yourself undervalued by your hourly rate. Alternatively, you could opt for another stream of income by jumping into entrepreneurship.
As an entrepreneur, you can use a similar formula for calculating how much work you do for your business to determine your hourly rate. However, the intangible freedom of controlling your own schedule may make a lower hourly rate more valuable than holding down a job working for an employer.
Particularly if you are someone who is debating whether to remain employed by someone else or move to full-time entrepreneurship, this hourly wage calculation may guide you. If you make more per hour in a side hustle, it may be worth taking it full time, assuming you are ready to find additional business. Even if you do not make more on an hourly basis in your side hustle, but you make enough to support your lifestyle, you are also in a safe place to make a change if you value the freedom entrepreneurship provides. Reflecting on all these metrics can help you make the right decisions for your income streams in the future.
Your Health
Your health is the most important thing you have, so assessing how well you are doing at the end of the year is essential. Ignoring health issues is expensive, and it shortens your life. We fully support spending both time and money on your health.
To that end, when looking at your health over the course of the year, we recommend starting with the big pillars of health and then working to specific health concerns unique to you. Gauge your general nutrition, fitness, sleep, and stress levels. Dive deeper as necessary: If you made changes to your diet, use the scale above to assess whether those changes made you feel better or may need some adjusting. Do the same for a new fitness plan, sleep schedule, or stress management technique.
Another key with the pillars of health is to be honest if you are completely ignoring any of them. Even fitness enthusiasts may ignore managing stress. Some regular gym members wonder why they cannot gain muscle while their circadian rhythm is unregulated. If you are completely neglecting any of these categories, a “do more” (or truly, a “do now!”) is essential to maximize your health and enjoyment of life.
If health is a priority for you and you regularly check in on these categories, you can also think about how any extra health-related activities made you feel. Using the scale above, decide whether the sauna, cold plunge, cryotherapy, massages, acupuncture, chiropractic appointments, red light therapy, or whatever else you are doing impacts how you feel. Decide what you want to continue, what may not be worth keeping, and what you want to start.
Finally, if you have specific health issues that require focused attention, consider what steps you took to address them and whether you were happy with those steps. This point is for everyone from an athlete recovering from an injury to someone with a chronic illness managing symptoms. Particularly with chronic illnesses, not everything can be controlled, but determining how to give ourselves the best quality of life is always worth the time and money.
Your Time
Time overlaps every category, but it is worth highlighting on its own in a world where businesses compete for time and attention. Protecting some of your time can help with the previous category as well as the next two. Assess whether you are happy with how you spend your time.
The annual wage calculation may already provide some insight on this topic, but your time is worth analyzing from both a micro and macro perspective. On a daily basis, are you happy with how you spend your time? Do you have time for that workout and time to get a meal with a friend? On a monthly or yearly basis, are you able to travel where you want, connect with family that lives far away, and prioritize hobbies over the obligation of making money?
You may be happy with your time in one of these respects but not the other. If you find yourself at peace but a bit bored, like you are missing out on adventures, you may be managing your daily time well but failing to plan your annual time to allow for the biggest adventures. On the other end of the spectrum, if you find yourself constantly busy or stressed but are happy with adventures you had, who you saw, and what you accomplished in a year, you may be protecting time for annual priorities well without managing daily time optimally.
Using the scale above, assess your daily time allocation and make notes of any uses of time you would like to decrease, increase, add, or remove. Assess your annual time by reflecting on what you enjoyed (that trip to Iceland, family reunion, weekend away with your friends) and what you wish you included or prioritized. Some priorities, like training and completing an Ironman, will span these two categories. If you notice those priorities appear in both areas, you likely discovered a point of focus for the next year.
Your Relationships
Prioritizing your relationships in a busy world should add happiness to your life. Analyzing your relationships at the end of the year has multiple elements. First, look at the time overlap: Are you dedicating the time you would like to your relationships? If not, this is an important area to add joy to your life.
The details of how you are maintaining your relationships can also impact your happiness substantially. You may be keeping a long-distance friendship afloat with texts here and there, but even having a monthly call with a friend may brighten your mood for a day. Note where you recognize that these shifts in how you maintain relationships can improve your happiness, as well as your friend’s happiness! If you have the time and means, extend this farther: Visit friends and family in far places when you can since seeing the people you love is far more important than “priorities” like your job.
Finally, on a drearier note, assess whether you have relationships in your life that are exclusively sapping your energy and whether it is worth maintaining those relationships. While dropping a relationship completely should never be an easy decision, there are situations in which it is the best decision to protect your energy and happiness. There are also middle grounds and degrees of energy protection: You can accept someone as an acquaintance that you see in groups or at parties who you will not go out of your way to assist in a one-on-one situation.
In general, I find it best to keep those that detract from your energy at a bit more length so you can fully dedicate your time and energy to your closest loved ones when they need your help. Drawing these boundaries in advance helps you help the ones you love more.
Your Happiness
This one is the easiest and the hardest: Were you happy this year? Sometimes we can review our year by each category without completely acknowledging how we are doing as whole people. It is easy to go through this assessment if you are someone who is hard on yourself and decide your net worth is stagnant, your job does not pay the best, you definitely should be working out more, and you should probably call your friends more. These things can be true, and you can also be happy right now. That is worth acknowledging, and it is likely an indication to make slow changes because happiness means you are doing something right for yourself.
The reverse can also be true. You may feel unhappy despite growing your net worth by $100k, getting a new job, setting lifting PRs in the gym, dedicating more time to reading each day, and making a new friend. Pinpoint what is keeping you from happiness and whether your unhappiness is rooted in feeling unfulfilled in a particular category or can be improved with a mindset shift.
Annual reviews are terrific to assess many areas of your life. But generally speaking, if you are happy, just keep going.
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