Money is essential for life as you know it. Unfortunately, for many people, it is a merry-go-round. You earn it and you spend it, often before you’ve finished earning it.
The average Australian owns $3,841 on credit cards, has loans of $17,700, and a mortgage of $565,881.
It’s not a great picture and a good reason why everyone should speak to a specialist in financial planning and have a financial check-up. The majority of people leave this until they are in a financial crisis when they should be doing it at least once a year.
Here’s what you need to do.
List it
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The first step in any financial check-up is to list your current earnings and outgoings. This can be useful as you may have standing payments that you’ve forgotten about. It can also be beneficial as you will be able to instantly tell whether you have more coming in or going out.
You can’t create a plan for the future without knowing the starting point.
Consider Goals
Every person or couple should have a simple set of goals:
- Earn more than you spend
- Create an emergency fund
- Save for retirement
Of course, you may need to tweak your expenses or find a way to earn extra money to ensure you earn more than you spend.
Your emergency fund should be the equivalent of 3-6 months earnings, this allows you to survive if the unexpected happens, such as a pandemic or job loss.
However, if you don’t have any savings and have an emergency, taking SMS loans in Sweden may help no matter you are worldwide. It’s the perfect loan for people looking for a small short-term loan to cover unexpected financial expenses.
Finally, you need to decide how you would like to retire and what money you need for retirement. This will help you create a savings plan to make it possible.
Check Your Debts
As part of a financial check-up you need to total your current debts and then come up with a plan to eliminate them. You’ll never achieve financial independence or reach financial goals unless you eliminate the debt.
It’s time to create a plan and pay it down a little at a time. Once you’ve worked out a schedule, stick to it.
Insurance
If you have any assets, such as a house or even an expensive car you should ensure they are properly insured. You may be surprised at how many people underestimate the cost of rebuilding a home. While you hope the worst never happens, it is nice to know the insurance is in place to help if the worst does happen.
Investments
As part of a financial check-up it’s important to look at any investments you have and how they are performing. A specialist in financial planning will help ensure your investments are in the best location to provide the highest possible returns.
Final Thoughts
It can seem scary to stop and take stock of your financial position. But, once you have done it you’ll find it’s easier to focus on where you want to be and take small steps to help you in the right direction. Undertaking a financial check-up every year will help you to be ready for anything.
