From a financial perspective, it’s pretty safe to say that many of us are happy to see 2008 come to an end. From a planning perspective, the start of the new year is a good time to take a fresh look at your finances — even if you’re worried about what you’ll see.

The Big Picture

It’s possible that you’re in better shape than you think you are. And the best way to find out is to look at your current net worth — the approximate value of your assets minus the amounts you owe. This will give you a starting point. It will also be a useful figure to have so you can measure your progress a year or two from now.

Check Your Cushion

An emergency fund is always an important element of a financial plan. But it’s particularly critical when the economy slows or stalls. Make sure you have a comfortable amount — ideally enough to cover expenses for three to six months — in an easily accessible account.

Review Your Asset Allocation

Look at the current value of your investments and check your portfolio’s asset allocation. Volatility in the markets is likely to have caused a shift in your asset allocation. Evaluate your time frame and your tolerance for investment risk, and consider whether it makes sense to rebalance your investments.

Check Your Insurance Coverage

If your net worth has decreased, it may be a good idea to increase the amount of life insurance you (and your spouse, if applicable) carry. Disability insurance can also provide protection by providing income in case you are unable to work due to illness or an injury.

Think of the Future