As important as it is to get your health checked up regularly, it is also vital to run a financial check-up on your investments. When you understand your current financial situation and how it can impact your future financial situation, you can take preventive measures to boost your financial health altogether.
Step-by step guide to giving yourself a financial check-up
1- Review your financial plan
The first thing to check your investments’ financial health is to review your financial plan from scratch. This means looking at where you started from, the returns earned from each instrument, its current position and future projections. Also, check if any amendments you need to make to the plan fit well with the current financial dynamics.
If you still do not have a financial plan, it is best advised to devise one as soon as possible, as that will help you narrow down your financial goals, objectives and timelines. It would be best if you took the advice of a financial expert while drafting the final plan and ensure that you start with a simple income, expense, savings and investment segregation.
2- Review the emergency fund
It is essential to have an emergency fund in place that consists of at least six months’ net income for your entire household. If you do not have an emergency fund, we recommend you create it as soon as possible.
The emergency fund can be used during any domestic, health or financial emergency and helps individuals during times of crisis. Always make sure to check if the correct amount is still in the fund and if not, top it up with the required balance.
3- Track your spending
When you look closely at your income and expenditure, you will understand how much you are spending and if you need to cut expenses to save more. Cancel any unnecessary items out of your expenses and shift that amount to your investment portfolio.
Keep track of your debit card deductions each month and any other fees you pay to the bank for their service. This will help you keep a detailed track of where all you spend your money.
4- Track your borrowings
Borrowings account for a good percentage of your spending through interest paid. For a thorough financial check-up, you need to separate good debts from bad debts and devise a plan to get rid of the bad debts. Eliminate the high-interest rates that come with credit cards if you can and focus more on enhancing your investment portfolio instead.
Reviewing mortgage arrangements can also help determine if there is a lower interest rate alternative available.
5- Check your pension funds
Pension funds are the ones that your employer creates for your post-retirement life. It is vital that you keep checking your pension funds and keep track of it so that you are able to enjoy a decent post-retirement lifestyle.
Draw a schedule of transferring the funds to your pension funds every month from your salary on the basis of the current value of your income, right no end to its future value. Make sure to keep a buffer value in the middle to adjust the inflation rate.
You can also include information about any other pension schemes that you are contributing to in your financial health check-up to keep track of funds in that, too. By doing this, you can increase the account you are saving based on the current economic situation and its impact on the future.
6- Keep track of all your other savings and investments
To keep your financial health in place, your other pension arrangements, saving accounts, and investment portfolios must be regularly reviewed as well. If you have a rental income or money flowing in through another asset, make sure to keep track of that as well and adjust the pricing as per the pricing standards in the industry. Schedule all your pension schemes and funds so that you never miss a monthly payment.
Review your investment portfolios and securities in detail to see if your investments are still fitting your investment objectives, and make any changes required as per your currency and future requirements.
Conclusion
It is essential for you to keep track of your financials to ensure that you are financially healthy. Changing times need amendments in your investments so that they match your long-term finical objectives. Keep track of everything in place, schedule your funds and protect yourself and your loved ones financially by investing in the suitable securities at the right time after consulting with a financial expert.
To speak with someone about your investments and get a financial check-up, request an appointment now by clicking the link below.
