Is my spending out of control? What am I doing with my money? What does my retirement look like? Not reviewing their financial plans is often a major drag on many people's journey to financial freedom. Therefore, running a health check-up on one's financial plans is essential to building a personal financial plan that ensures your future is well taken care of.
Are you intentional about achieving lifelong goals and affording the things you want in life? You're in the right place. Here's what to consider when running a health check-up on your financial plans:
1. Track Your Net Worth Over Time
Is my net worth growing? Frequently check your net worth and keep track of it to ensure you're in line with your long-term goals. Keeping track of your net worth gives you more clarity on your financial health and whether or not you're on course to attaining your financial goals and objectives. Keeping tabs on changes to your net worth allows you to adapt quickly to changes in your financial situation. When keeping track of your net worth, growing it becomes a whole lot easier since you're in a better position to set priorities right and practice financial habits with positive results on your financial health.
2. Consciously Track Your Savings to Make Financial Plans
Am I saving enough to retire comfortably? Am I getting closer to the ideal savings amount I intend to make for my children? If your savings plan is not very efficient, sudden financial changes may throw your financial plans off track. Indeed, as time progresses, you'll want to reassess your savings plan to ensure you're on track to meet your saving goals.
Checking in on your savings every so often gives you a great deal of insight into emerging shortfalls in your saving plan. What this does is that it gives you room to take steps that will ensure you're putting aside more money that can be utilized in times of emergency, thus allowing you to live a more peaceful life.
3. Monitor Your Bank Accounts and Bill Payments Regularly
Am I managing my financial plans in the best possible way? Just because you've automated your income and expenses does not mean you're out of the woods yet. You need to be on top of everything happening with your money and stick to your budget if you're going to improve your control over your financial lifestyle. Since financial priorities may change from time to time, it's important that you update your scale of preference. Then, differentiate between needs and wants at any given point in time.
To establish whether you're drawing closer or drifting further from your financial goals, compare your account debits and credits, check your bank account deductions against scheduled payments, and compare your actual spending with what you had budgeted for. By doing this, you'll be able to spot areas where you're overspending. Then, take notice of any subscriptions you could be paying for, yet you never get to use them.
4. Periodically Review the Costs of Your Insurance Policies
Are my insurance policies still right for me? Don't just have insurance policies for your health, life, home, motor vehicle, and personal property in place. Ensure you have the right insurance policies whose terms are customized to your financial goals.
At least twice a year, you should sit and assess the costs of your various policies, scrutinize the terms, and shop around to see whether you're getting value for your money or not. By reviewing the costs of your insurance policies periodically and comparing them with what else is out there, it should be easy to figure out whether you're on track to accomplishing your financial goals.
Run a Health Check-Up on Your Financial Plans
If you're going to succeed with your finances, planning is super important. To ensure your plans are fool-proof, it's necessary to run a financial health check-up on your financial plans. Make it your habit every so often to set aside some time and check in on the health of your financial plans. Good luck as you seek to ensure your financial plans are healthy!