Do you know how you are currently doing in a financial sense? Ideally, you need to have a firm grasp of your money situation at every stage of your life. Otherwise, how do you know when you need to pull your finger out and work a bit harder to get into a more comfortable financial position?
But the truth is that not too many of us know exactly how we are doing when it comes to money. It can be difficult to keep on top of finances, especially when there is so much to plan for and organize. All of this planning means that money can easily get put into different accounts, insurance policies, and payment plans. Eventually, you might forget to keep track of all these pots of cash that are dotted around in different places. This could lead to you completely forgetting exactly how much money you have.
Don’t worry if you have lost track of your finances. You just need to carry out a quick financial health check. This is something you should be able to do on your own; there’s no reason why you would need to see a financial advisor about this specific check. In fact, it is incredibly easy to do yourself. You just need to ask yourself some questions relating to your finances. Read on to find out exactly what they are!
What Is Your Attitude Towards Money?
First of all, it is important to assess your attitude towards money and your finances in general. This is mainly because our attitudes to risk change quite a bit over the years as we get older. So, if you believe that your attitude to risk has changed drastically over the past few years, you might want to try and change your financial situation so that it now reflects this change. For instance, the majority of people are open to a lot more risk when they are in their twenties. This is, therefore, the perfect time for them to invest in high-risk investments that could potentially bring them big returns. However, once you get older, you might not be so open to risk. So, it would be a good idea to move money from high-risk investments into some safer ones.
How Much Money Is In Your Main Bank Account Right Now?
How is your main bank account looking right now? Ideally, it should have enough cash in it to get you through to payday. If it isn’t looking like you have enough money to get you through, then it could be worth thinking how you could improve this. It might just be a case of cutting down on some luxuries and lowering your monthly spending. Setting up a budget can help you see if there are any expenditures that you will be able to cut back completely on. If you still struggle even once you have reduced your outgoings, you might want to consider finding some financial help, such as a payday loan. However, you won’t be able to survive on a payday loan for the long term, so it’s important to find a long-term solution, such as finding a new job that pays better. You could even check www.thebalance.com for ideas on how to boost your income.
How Much Do You Have In Savings Accounts?
Your main current account shouldn’t be the only bank account that you have. After all, you also need one for your savings. It’s really not a good idea to keep the money you live off on a day to day basis and your savings together in one account as it could be all too easy to start spending your savings! There needs to be a clear divide between the two. So, if you don’t already have a savings account, you should open one without delay. If you do already have one, make sure you regularly check it so that you have a good idea of your current levels of savings. It’s also a good idea to take a note of the account’s current interest rate level. If you think you could get a better interest rate elsewhere, you should consider moving your money into a better account.
Have You Taken Out Plenty Of Insurance?
How do you think you would financially cope if you needed to make some emergency payments? For instance, what if you or one of your children were in an accident and rushed to hospital? You might then be faced with some extremely big hospital and medical bills. There’s a very good chance that you might not have enough savings to cover these costs. There is one way you can prepare for these kinds of emergencies, though. You just need to take out plenty of insurance. Health insurance will cover any medical bills that you receive, for instance. But buying policies isn’t enough. You need to make sure that you continually review your policies. It might be worth switching to a different internet provider after a few years. These types of companies are constantly creating new policies to try and entice customers away from their competitors. So, after a few years or so, you might find that you can take out a similar policy to the one you have a lot cheaper by switching provider. But of course, the main thing you need to worry about is that you are correctly insured in the first place. So, if you don’t already have any insurance, taking out a policy should be your main concern!
Have You Already Set Up An Emergency Fund?
As well as insurance, you also need to protect your financial situation by setting up an emergency fund. This is a pot of savings that you can dip into whenever you need any cash in an emergency. Make sure that this pot of savings is kept in a different account to your regular savings, though. While your usual savings might be used for fun things like a family holiday or a new car, the emergency fund is strictly for any emergencies that might unexpectedly occur in your life. One example could be if you ever need to pay for any emergency home repairs. Perhaps a pipe might burst and you need to fix some water damage to your property’s structure. Or you might end up requiring some minor surgery which isn’t necessarily covered by your health insurance plan. If you don’t have an emergency fund right now, it should be quite easy to set up. You just need to open a savings account and then start paying into it on a weekly or monthly basis. You’ll be able to amass quite a bit of savings in it before you know it, and you will then be much better equipped to deal with any emergencies that happen!
Are You Currently Paying Off Debts?
If you are trying to pay off debt right now, it could be having a big effect on your overall financial situation. But don’t worry; that effect isn’t always a negative one! For instance, if you are making all of your monthly repayments, then this will help to improve your credit rating. That’s because your credit rating is an overview of how well you manage your credit. Making regular payments on time will, therefore, show that you can be trusted with credit in future. However, if you are struggling to make your monthly repayments, you might need some help from other sources. It’s worth visiting websites such as www.debtconsolidationloans.com to find out how you can consolidate all of your debt. Doing this will make the repayments much easier to manage and meet as you will just have one repayment to make each month.
This month’s cover story: Can workplace pensions bridge the advice gap? Craig Rickman finds outhttps://t.co/woKERg2JJr
— Money Management (@MoneyMgmtMag) February 27, 2018
How Is Your Retirement Forecast?
When you are reviewing your financial situation, you shouldn’t just focus on the here and now. You also need to consider your projections and forecast for your finances when you retire. Ideally, you need to start planning for retirement as soon as you find a full-time job once you leave college. That way, you are giving yourself the best-possible chance to save as much as possible over the entire span of your working life. Thankfully, the majority of full-time jobs will come with a pension as an employee benefit. These are great because your employer will have to match all of the payments that you make into your plan. However, if you are self-employed or a contract worker, your job probably won’t come with a pension and you will have to set yourself up with a private one. Make sure that you do not delay in doing this, as putting it off will reduce the amount of money you have to live off once you finally do retire. So, don’t delay; start saving today!
Hopefully, all of the questions above can help you figure out how your current financial health is. If you think there are some areas that need fixing, you could be better off going to find some professional help from a financial expert.
It is important to keep an eye on your finances.
You bring up excellent points that someone of any working age should consider.