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Are Your Finances Healthy: Find Out With Our Free Check List

Updated: Jun 18, 2019

A doctor uses a stethoscope to assess the financial health of a piggy bank.

Whether you’re a recent graduate entering the workforce, a mid-career individual looking forward to retirement or a retiree enjoying a hard-earned retirement, you should periodically assess your financial picture. Below is a checklist that can be used for any stage of life to help you make sure your finances are in good shape.

Create a Budget

This sounds like a very basic notion but it’s critically important to understand your income flow and learn not to spend more than you earn. That’s how you’ll start to build your wealth.

Pay Down Credit Card Debt

Monitor your credit card expenses. If you have more than one credit card, then get rid of all your credit cards except for one card. Credit card loan debt will be three to five times higher in interest than student loans, so the goal is to focus on paying down your credit card debt as quickly as you can. Try to pay more than the minimum each month.

Review 401k and IRA Accounts

If you are employed, then take advantage of your employer’s 401(k), 403(b) or similar retirement account that offers a matching contribution. For instance, if you need to contribute 4 percent of your salary to get that match, be sure to do so. It's free money from your employer. If you can afford it, also begin contributing to a Roth IRA. It’s a good to touch bases with a plan administrator at least once a year to make changes or adjustments to your contributions.

Designate Beneficiaries on Your Financial Accounts

By designating a beneficiary on a financial account, you’re designating who should receive the assets in the event of your death. This is a basic financial task you’ll have to return to as your life changes. Typically, a beneficiary can be your spouse or your children or a sibling.

Get Disability Insurance

Most employers offer disability insurance. This insurance will provide you an income stream should you become unable to work. It’s crucial, whether you’re in your 20s, 30s, 40s, 50s or 60s.

Review Your Insurance Policies

Get together with your insurance agent on an annual basis to review your insurance policies to include life insurance, house or apartment insurance. Speak with your agent about getting an umbrella policy for all your insurance needs.

Consider Using a Fee-based Financial Planner

Most financial planners work on commissions. However, you may be able to connect with a planner who will work with you for a couple of hours for a flat fee. He or she can give you a high-level overview of what you should be focusing on money-wise.

A good financial planner can give you strategies for how you can invest and/or save for the marathon financial goal of retirement. A financial planner can show you how saving a certain amount every month at a certain rate of interest return can result in a nice nest egg.

When we’re in our 20s or 30s, we tend to focus on the short term and not really think about the future. Having someone explain and map out a strategy of saving and investing is critical for success.

Create or Update Your Will

If you haven’t done so yet, create a will. This will outline how you wish your assets to be distributed. If you have a will in place, then you should review your will annually. Reviewing your will gives you the opportunity to update beneficiaries, power of attorney, healthcare proxy, etc.

Take Retirement Money When You Switch Jobs

The current employment trend is that people tend to stay with companies for shorter periods than prior generations. So if you make the decision to move on to another job, then make sure to take your 401(k) money with you. You can either roll it over to your account with your new employer or move it into an IRA that you control at a brokerage firm of your choosing.

Prepare for Retirement

If you’re retired, do an annual review of your budget and income flow. Review your investments and look at your risk tolerance to sustain your nest egg to avoid a big loss to your retirement funds. Consider downsizing. A smaller home could potentially reduce your property taxes, utilities and other expenses.Investigate long-term care costs and consider buying a long-term care policy.

Last Word

No matter what stage of your life you are in, it is critical that you periodically review your personal financial situation. We hope you will print out this checklist and use it each year to make sure your financial ducks are in a row.

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