5 Minute Financial Health Check

The path to financial fitness is like the path to getting fit from a health perspective.

You want to look good and feel good! Or maybe you aspire to six-pack abs! Whatever your fitness goal is, you can typically make one of two choices:

  1. You decide to go down a DIY program and improve your health.
  2. You recognise that you can’t do it yourself and take on a personal trainer.

Whichever choice you make, you need to come up with a training plan. The training plan will set the road map for you to achieve your fitness goal. Before you embark on this road to being healthier, you need to understand what your base level “fitness” is. Your personal trainer is not going to put you on an advanced workout plan if you’re just a beginner.

Similarly, you need to determine what base level “financial fitness” you have. And you want to identify what problem areas you have financially, so you know what you need to work on.

For that, you need to complete a financial health check, which is an honest self-assessment of your financially weak areas. It will determine your base level “financial fitness,” and it will identify your problem areas.

So, what questions should you be asking yourself?

It’s helpful to break this up into different areas of your financial life.

Here is just a snippet of the questions you could ask yourself in some key areas:

Income Plan – Does my income meets my living costs? Is my income well structure and tax efficient? Is my income being invested efficiently for wealth creation?

Investment Plan – Do I have an appropriate 5-year wealth plan? Do I understand the risk/reward trade-off between my investment strategy and other options? Are my investments achieving my goals?

Debt Plan – Is my debt is structured in the best possible way? Do I have the right mix of personal and investment debt? Do I have a strategy to eliminate my personal debt in the shortest possible time?

Risk Plan – Do my insurances cover me comprehensively for most foreseeable circumstances? Will my family continue to live comfortably if something happened to me? Do I review my insurance policies regularly?

Retirement Plan – Do I have a clear understanding of my retirement goals? Am I on track to achieve my required income in retirement? Will my retirement funds last throughout my retirement?

Estate Plan – Is my Will up to date and reflects my current wishes? Will my assets be transferred to all the right people, at the right time tax efficiently? Do I have someone that is able to make financial decisions on my behalf if I am unable to do so?

If you can’t categorically answer “Yes” to any of these questions, then that will tell you what problem area you need to focus on.

It’s important that acknowledge the areas that need your attention and then set a plan to improve them. Of course, you can stay in denial and keep doing what you’re doing in hopes that your problem areas will just miraculously fix themselves.

You’re probably thinking, “This looks a little time consuming and I’m not sure where to start”.

Well, we’ve made it easy for you. We have a financial health check questionnaire on our website where you can answer all the relevant questions and then you can schedule in a 15-minute phone call to go through your answers. Just navigate to https://finfit.com.au/5-minute-financial-health-check/.

It takes about 5-miutes to answer the questions. It could probably be he most important 5-minutes of your life.

Phil.

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