Your financial health

Do you believe you’re in a  financially  healthy situation? Do you have healthy financial habits? Not surprisingly, your answer to the first question might be directly tied to the answer to the second question. Below are some statements a person in a healthy financial situation might make about their finances and their financial habits. Which of these are true for you?

  • I feel good about how I manage money.
  • I have an asset manager I trust and whose values are aligned with mine.
  • I know my total net worth — including savings, investments, home equity — and have updated it in the last twelve months.
  • I have established short-term and long-term financial goals.
  • I know what my asset allocation is.
  • I have a regular savings and investment plan.
  • I have a retirement savings plan and contribute to it each month.
  • I have set priorities in the use of my money.
  • I limit impulse purchases by allowing a 24 hour “cooling off period” on expensive items.
  • I have enough money at the end of the month to pay all of my bills.
  • I have established a maximum amount for discretionary expenses each month and stay within that limit.
  • I am current on all debt and credit card payments.
  • I check my credit rating at least once a year, and before making a purchase such as a car or house.
  • My financial planning provides for loss of income due to illness or death of wage earners.
  • I have at least three to six months’ worth of living expenses saved in a “rainy day” fund.
  • I could take over management of our affairs if my spouse could not.
  • I have a will that includes provision for minor children/dependents and have reviewed it in the last five years.
  • I have both financial and health care powers of attorney.
  • I know where important documents — wills, trusts, deeds, tax returns, stock certificates, ownership papers, powers of attorney — are and have a list of them showing their location if someone else needed to locate them in an emergency.
  • I also keep a list of addresses and telephone numbers for my attorney, accountant, tax advisor, financial services partner, insurance agent, and other advisors.

If you don’t believe you’re in a financially healthy situation, perhaps this list of statements can help you find the root of your problem and how to fix them. For example, people who don’t set priorities in the use of their money and don’t limit their impulse purchases can find a direct correlation to not having enough money to pay bills, being behind on credit card payments, or not having three to six months’ worth of living expenses.

Finding the root of your financial health issues is only part of the solution: you’ll have to make changes in your financial habits and maybe even your attitude about money if you want the above statements to be true about you. Still, identifying the problems is a good place to start. So consider the statements above. Which are true about you? Which aren’t?

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