By June 26, 2012 Read More →

Financial Checkup Checklist

For most of us, checkups are a regular part of life. Annual physicals with our doctor, visits to the dentist, and regular car service appointments help us catch potential problems and assure that all is well.

If you were planning a long road trip, you’d stop occasionally and look at the map to see if you were headed in the right direction, wouldn’t you? An annual financial checkup serves the same purpose. It’s an opportunity to review how you’ve done financially and make sure you’re still headed in the right direction.

Certain life changes – the birth a child, a change in marital status (married, divorced, widowed), the death of a family member or changes to your health – should serve as reminders that a financial check-up is in order.

Other changes can also have a major impact on your personal finances. These include changes in your employment status or salary, changes in home ownership, significant changes in investment assets or debt, interest rate changes, receiving an inheritance and tax law changes.

1. Do you have a current cash flow statement?
Controlling your financial affairs requires a budget or cash flow statement. Tracking your expenses tells you if you are spending more than you earn and can help you reach your financial goals.

2. Do you have a current net worth statement?
Subtract what you owe from what you own to determine your net worth. Once you know where you stand, this calculation will help you with personal budgeting, saving and financial management.

3. Do you have a cash reserve for emergencies?
A major home repair, unexpected layoff, or sudden illness could increase your expenses and/or lower your income without warning. You should have 3-6 months worth of living expenses in your reserve.

4. Do you know how your investments are doing?
How are your investments doing this year? Does your asset allocation still make sense? Have you reviewed the fees you are paying on your investments?

5. Do you have a retirement plan?
The greatest risk to a good retirement is the prospect of outliving your money. Planning involves deciding at what age you want to retire, how much money you will need to pay for living expenses and extras such as vacations and where your money will come from.

6. Do you have adequate life insurance coverage?
Life insurance provides your dependents with a lump sum to pay off large financial obligations such as mortgage and a continuing source of income to maintain their standard of living.

7. Do have adequate disability insurance coverage?
Disability insurance helps replace a major portion of your income when you are sick or injured and unable to work in the short and long-term.

8. Do you have an up-to-date will and powers of attorney?
Having a current will, a power of attorney for financial affairs and a power of attorney for healthcare are the cornerstones of any estate plan.

Your Checklist Score
Use your Checklist Score as a guide only. The most important part of this checklist is to make you more aware of your personal financial situation and to motivate you to take action.

A “Yes” answer to each question is worth 12.5 points, a “No” answer is worth zero. The total possible score is 100 points (8 questions x 12.5) or 100%.

Use this calculator to perform a checkup on your personal financial situation.

Financial Checkup Calculator


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