With the current year nearing its end and a new one just around the corner, the holiday season is a perfect time to perform a financial health checkup. After all, a financial wellness checkup can help us recognize any of our money-related habits that might need improvement — and help us plan for the adjustments needed to improve our financial health (and minimize any money-related stressors) moving forward.
Whether you’re an experienced investor with advanced financial skills or just an everyday American looking to take more control of your finances, consider taking the 10 steps in this financial health checkup checklist to set yourself up for more money-related success in the coming year:
- Set your goals … and celebrate your wins — A good way to kick off your financial health checkup is to look back at your previous year’s financial goals and evaluate how much progress you made toward reaching them. And whether your goals include paying off all your debts, saving for retirement, putting funds toward a future home purchase or contributing to a college savings fund, be sure to celebrate the milestones you achieve along the way. And remember — each one is getting you closer to realizing your financial dreams. Next, put some time and thought into identifying and prioritizing your top financial goals for the upcoming year. Creating a list of your goals will help you stay focused on them and motivated to achieve them, as well as help you gauge your progress throughout the year as you take steps to improve your financial well-being.
- Consider your cash flow — To manage your money wisely, it’s critical that you have a strong understanding of your income and your expenses. Look into the amount of money you have coming in and going out each month and answer the big-picture question — are you living within your financial means? If you hold accounts at Arthur State Bank, you can use our
- Scrutinize your spending — Regularly reviewing your bills and other spending can help you identify any unnecessary or excessive expenditures that you can either eliminate or cut back on to save money. Such a review can also give you the opportunity to evaluate the pricing on some of your subscriptions, insurance policies, recurring services, etc., then shop around to see if you can find better deals. And by doing either of these, you can give yourself extra funds for saving, investing or otherwise making strides toward achieving your financial goals.
- Analyze your investments — If you have an investment portfolio, give it a careful review to ensure that your current investments such as stocks, bonds, mutual funds, annuities and CDs are still in line with your financial goals and risk tolerance. If adjustments need to be made, this may be a good time to consider making moves that align your asset allocation with your short- and long-term financial goals. And keep in mind that having a diversified financial portfolio can help you keep your overall risks in check and safeguard your financial well-being.
- Step up your savings — Whether setting money aside to pay for college, to support a comfortable retirement, to build an emergency fund or something else, the sooner you can start saving, the better. And of course, the more funds you can devote to your savings, the faster you can build them up. One rule of thumb recommended by many financial experts is the 50-30-20 rule, which can serve as a helpful guideline on how much of your income to spend vs. how much to set aside. But however you choose to approach your savings and investments, try to build and maintain a habit of setting money aside regularly, as this is among the best ways to boost your financial health.
- Put a dent in your debts — One of the most important steps to achieving financial well-being is to pay down (and eventually eliminate) your debts — especially any high-interest debts such as the ones many consumers carry on credit cards. Make a plan to eliminate your high-interest debts and to reduce the overall debt load you’re carrying. In addition to improving your financial health, paying down debts can help you reduce financial stress and free up funds for saving and investing.
- Build a budget — Having a personal or household budget in place is one of the most effective ways to ensure that you’re managing your money in a responsible way — and it can serve as a road map that helps you control your spending and reach your financial goals. If you don’t already have one built, take the steps needed to create a budget, and do your best to stick to it. Then, as your financial situation evolves and changes, review/adjust your budget as needed to improve your financial wellness.
- Examine your insurance — You never know when unexpected setbacks may strike, and having adequate insurance in place can help protect your financial fortunes when they do. Take the opportunity to review your insurance policies to ensure that you’re sufficiently covered against the biggest risks you may face in life. And whether you carry homeowner’s insurance, renter’s insurance, auto insurance, health insurance, life insurance, or a mix of these and more, explore any opportunities you may have to bundle your insurance policies to achieve savings on your premiums.
- Assess your estate plan — A financial health checkup presents a great opportunity to review important legal documents such as your will, trusts, guardianship designations, healthcare directives, beneficiary designations and other legal records to ensure that they accurately reflect your current situation and intentions. And if you don’t have any such needed records in place, this is also a great time to establish them so that they’re on hand to protect your loved ones and your financial assets should the direction they provide ever be needed.
- Get expert insights when needed — For many of us, financial expertise simply isn’t a part of our skill set — especially when it comes to complicated financial topics. If dealing with any aspects of your personal finances becomes overwhelming, consider getting the help of a financial advisor who specializes in helping people manage their money wisely and achieve their financial goals. These professionals are trained to assist people with putting a plan in place for overcoming their financial challenges and reaching their financial goals — and often, a little expert guidance can go a long way toward achieving financial well-being.
Proudly serving South Carolina since 1933, Arthur State Bank offers accounts and services to meet a variety of financial needs. To help you achieve all your financial goals, the bank offers in-person service as well as a range of convenient digital solutions. To learn how Arthur State Bank can help you with banking needs ranging from checking and savings to retirement accounts, mortgages, other personal loans and more, visit arthurstatebank.com.