Five Simple Ways to conduct a Personal Financial Check-up

When we get sick, we go to a doctor and get a medical or physical check-up. If our money from our pockets also gets sick, where do you go?  We should go see a money doctor or financial advisor.  

Since most people don’t actually know where and who to go, here are just some questions you can ask yourself and try to assess your financial status.

1. If you get sick or worst get hospitalized, are you ready?

If you may have savings, is it intended for health? Most health problems always come unexpected. The savings you may have, probably not intended for health, will be used. What if it gets depleted? If you are a parent or if you have a sick parent, who do you think will pay? The children, ofcourse.

Do you want to be a burden to your family when you get sick?

Have a savings for your health.

2. What if you die too soon, are you prepared?

A very striking question you can ask yourself if you are the breadwinner or if you are a parent. Most people don’t know how to protect themselves in case of death.

How would you like that instead of leaving your family with debts in case of death, you leave them an amount of money equivalent to your income while you were still alive?

Know how to do income replacement and get yourself protected.

3. If you lose your job right now, how long can you survive without your income?

Saving is not a habit but a must for everybody and saving should include emergency funds. Do you have minimum savings worth 3 months of your income in the banks? With that amount, at least you can survive long enough to look for another job.

Be ready when it comes to emergencies.

4. Are you in debt? When are you planning to get out of it?

Do you have a detailed plan on when to fully pay all your debts? How about a strategy on how to pay it? Are you conscious on the interest rate and how money is working against you, paying more than the amount you borrowed?            

Understand how debts work, be conscious on the interest rate and eliminate or at least minimize your debts.

5. Are you ready for retirement?

If you have a big amount of savings (say millions) and it earns interest per year as a passive income, do you think you can retire early? Do you have to wait age 60 to retire? Age does not determine retirement, money does. Most people think that age 60 is the perfect time to retire. But what if you don’t have enough savings at that age, can you retire?

Do you see a lot of aged people, still working because they never expected and planned well their retirement? Do you want to become like them? The perfect time to plan for your retirement is the first day of your job. Plan your retirement as early as now.

In order to avoid being financially sick, you must build a good financial foundation. Being wealthy doesn’t just mean having a lot of money, but knowing how to handle it. The wealthy people are not the ones who have the most, but the ones who need the least. You may see someone who has a grand car, but you don’t know if he is living in debt because of that luxurious item, or you may see someone who is satisfied with a small house but can provide all the needs of his family.

How’s your financial status? Are you financially healthy?

Build a good financial foundation.