Just as you would go to the doctor for a routine check-up, it’s important your finances get a regular health screening too.
Here’s a simple questionnaire to score your family’s financial health. Just answer each question with a ‘yes’, ‘no’, or ‘not sure’.
- Do you know how much cash you have in your wallet or your bank account (no peeking)?
- Do you know if you earn above or below the average salary for your occupation, taking into account your qualifications and experience?
- Do you know how much debt you have?
- Do you regularly reconcile your outgoings with your income?
- Do you ever review your services and utilities to see if you could get a better deal from another supplier?
- Do you have a pension? If yes, are you contributing as much to it as you can afford?
- Do you know what your net worth is?
- Are you content with your finances?
- Do you spend less than you earn?
- Do you save regularly? If so, are you getting the best interest rate on your savings?
Now score yourself one point for a ‘yes’, zero for a ‘no’ and subtract one point for a ‘not sure’. For questions, 6 and 9, you must answer yes to both sections of the question to gain a point.
Between 7 and 10 points: You’ve got a decent grasp on your finances. Keep up the good work and you shouldn’t run into any unexpected financial upsets. Consider an annual review of your finances with a qualified financial adviser to make sure your pension and savings are working as hard as they could for you.
Between 4 and 7: You’ve a good overview of your finances, but there are areas in which you could do better. Make sure you review your finances regularly for maximum financial fitness. It wouldn’t hurt to pick up a book on personal finance from your local library or search for some online financial self-help guides.
Between 0 and 3: You may have been busy with other areas of your life and let your finances slip. A financial makeover will help get your finances back on track. Put all your bills, wage slips and bank statements in a central location where you can review everything at least once a month. See where your money is going and where you can make savings. And don’t forget to plan for the future, too.
Less than 0: Oh dear! If you’ve mostly answered ‘not sure’, you probably aren’t taking your finances seriously and you could be in for a financial shock sooner rather than later. Take time out for a serious overhaul of your finances ASAP. At this stage, you may benefit from the help of a professional – especially if you’ve more outgoings than income. A financial expert can show you how to budget to get out of any debt and back into financial health.
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