How to take a financial health check


These days, being in good physical shape seems to be everyone’s top priority. We go to great lengths to make sure our bodies are in great shape, inside and out. We do workouts, diets, and do physical exams every now and then to make sure we look and feel great!

But have you recently taken the time to check your finances are healthy? Otherwise, a financial health check should be on your to-do list. Just like with a physical checkup, you need to have a regular financial checkup to keep your finances in peak condition.

A financial health check is a brief assessment of your financial situation to determine your ability to meet your financial goals and your preparedness for unforeseen financial events. It’s a great way to put things in order, regroup, and look back to make sure your finances are on track. It will also help you adjust your strategy for the coming months.

Now you’re probably thinking to yourself, “This seems to be taking a little while and I don’t know where to start.” But having a financial health check can be done in minutes, and we promise it can be faster than waiting for a doctor. Here’s our basic guide to get you started.

When you apply to join a new gym, they usually ask themselves the same question: what is your goal? Usually the answer is to have six pack abs or to have a certain weight that you think you are happy with.

This also applies when looking to achieve financial health; you have to have an end goal to have the right strategy to achieve it. Are you considering early retirement? Do you want to pay off all of your debts (credit card debt, personal loans, mortgages, etc.) within a certain timeframe? If you haven’t yet set your goals, a financial health check can help you start your financial fitness journey.

If you already have goals, this recording can help you realign your financial priorities. Have you recently married? Have you and your partner had a baby? Have you had any changes or events in your personal life that made you realize you need to start your estate planning?

Getting back to basics and aligning your goals is the first step in a deep financial review.

Having a thorough understanding of your current financial situation is an important step in a financial health check. Not only will this let you know how far or near you are from your goals, it will also help you determine your areas of financial weakness.

So what questions should you ask yourself? Here are some basic examples of questions you might ask yourself:

  • What is my total income?
  • Does my income cover my living expenses?
  • Do I have an appropriate long-term financial plan?
  • What is my current debt level?
  • Do I have an emergency fund?
  • Do my insurance cover me fully for the most foreseeable circumstances?
  • Is my pension contribution sufficient to meet my retirement goals?
  • Is my current budget right for me?
  • What does my last credit report show?

These are just a few of the questions you can ask, but the main things you can focus on are your income, expenses, and debt. You can add categories if needed. For example, you can have investment plans or you create your estate plan.

Having a clear picture of your financial situation will help you determine which areas need the most attention and, therefore, help you prioritize accordingly. It can be difficult to go into the finer details of your finances, but this key step will help you reach your financial goals.

When you have determined the problems with your finances, you return to the drawing board.

Now that you’ve taken a fresh look at your financial goals and seen your financial position, it’s time to adjust your strategy to meet those goals. This could involve creating a new budget, increasing your income, increasing your super dues, or consolidating your debt.

For example, you have determined that your current insurance policies do not provide you with sufficient coverage for incidents that may arise. Having the right insurance policies is essential to protect your assets. You can call your agent to make sure you understand what your insurance covers and does not cover. From that point on, you can take the appropriate steps to achieve better coverage.

Another example is that you have checked your credit score and determined that it will be difficult for you to get a good deal on a house with your current rating. While the situation is not favorable, it can motivate you to start taking steps to improve your credit score.

If you’re not sure how to proceed and want to get everything in order, getting financial advice might be right for you. In that case, be sure to read our tips for choosing a good financial advisor.

No plan has a chance of succeeding if you don’t follow it. If you find that your problem is your cash outflow, continue to track your spending to make sure you’re not overspending. If you are in a payday loan debt cycle, you should take steps to prevent yourself from reverting to payday lenders as a last resort, such as building up an emergency fund.

You should consider bringing in one or more accountability partners to help you achieve your goals. These are usually people with whom you share your goals. It could be your spouse or immediate family, or people who have accomplished something that you are trying to accomplish.

Their main job is to keep you motivated and on track (and vice versa) when you’ve fallen off the wagon or feel like giving up. But don’t feel bad during these times of weakness, because these things happen!

Now that you’ve learned the basic steps, there’s no excuse to postpone your financial health checks! Set an alarm on your calendar to review your finances on specific dates or months. You can do your check-ins monthly, quarterly or annually.

Outside of these times, you should take stock of your financial health when something changes in your life, such as your salary, housing situation, or your debt load.

These will help you stay on top of your financial situation and save you valuable time in achieving your goals.

Your financial health is important, as is your physical health. Getting a financial well-being check can help you determine what adjustments you need to make in your life. Our finances can make or break us in many cases, so knowing where we stand financially is essential.

These are just a few of the quick steps you can take to get the big picture of your financial health. This will give you the basics of where you are at. If you want to learn more, explore nestegg to learn as much as you can about different areas of your financial life, such as investing, saving, budgeting and more!

How to take a financial health check

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Last updated: June 29, 2021

Posted: June 29, 2021

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