Finite element model updating (FEMU) is an advanced inverse parameter identification method capable of identifying multiple parameters in a material model through one or a few well-designed material tests. The method has become more mature thanks to the widespread use of full-field measurement techniques, such as digital image correlation. Proper application of FEMU requires extensive expertise. This paper offers a review of FEMU and a guide to practice. It also presents FEMU-DIC, an open-source software package. We conclude by discussing the challenges and opportunities in this field with the intent of inspiring future research.