How to Conduct a Financial Checkup? Nowadays, influencing your financial future isn’t as challenging as it used to be; the ways to do this are very abundant. Many things change throughout the year, and your budgets need to reflect that. Assessing your financial growth can be stressful and overwhelming but with this checkup, you will keep your financial health on a good track.
Make a budget If you don’t have a budget plan, consider making a budget to help you better achieve your financial objectives. If you do already have one, think about any recent changes in life such as a new job, marriage, buying a new house, and paying expenses. Your overall financial goals might change as new life events happen, so be sure to adjust your budget accordingly.
Monthly income It is very important to know how much you earn in a given month. If you don’t know this figure, it’s impossible to make a budget.
Know your net monthly income because this is your base to start building wealth.
Analyze your taxes Keep a record and take full advantage of tax deductions that might be available to you. Stay organized by keeping all your tax documents properly and make sure you’re choosing the right filing status.
Savings Rate The most important thing on this list is your savings rate. The higher your savings rate, the faster you will start building wealth.
Insurance Coverage Life insurance should change as your life changes. If you’ve acquired a home or had children think about adjusting your life insurance plans to reflect those changes. Go around and make sure you’re getting the best deal from every insurance that you choose.
Get prepared for emergencies It’s great to prepare a budget for the expected, but it’s imperative to budget for the unexpected. Recessions, car repairs, and health emergencies can affect your savings. Having three to six months’ worth of living expenses saved is highly recommended to help get you through surprise circumstances.
Retirement funds As soon as you start your first job, you should start thinking and planning for your retirement. Every year you need to make sure that the amount you are currently saving meets your needs and goals. As a financial advisor, I often recommend keeping away at least 10 to 15% of your pre-tax income.
Revisit Short and Long-Term Goals Many things can change in a year — marriage, death, or growing your family and experiencing a major career change. Any small adjustments can have a major impact on your financial status. That’s why it’s significant to regularly review your long-term goals and progress towards them while revisiting and evaluating your shorter-term goals as well. It has been noted that 60% of Americans benefit from receiving retirement advice from a financial professional.
Seek advice Working with a financial advisor can be of good benefit when it takes your emotion out of your investing decisions and focuses on your long-term goals — which can be particularly important when the stock market is volatile and your revenue goes down. We can help you stay on track and assess your overall growth and let you know about good decisions to make in case you are falling short.