Your 7-Step Annual Financial Health Checkup

The end of the year is a great time to assess your financial health and make adjustments as needed in the new year.

Zions Bank Jan 1, 2020

This article was originally published on Jan 1, 2020, and refreshed on Nov 23, 2020.

Did you get a physical checkup this year?

Hopefully you said, “Yes.” Sure, it is no fun to get poked and prodded, but physical exams can reveal important information that will make you healthier, and maybe even save your life.

Wouldn’t it be nice if you were able to get a financial health checkup at the same time you visited the doctor? It might include the following.

Financial health checkup step #1: Does your financial life expectancy match your life expectancy?

Many people today are expecting to live much longer than previous generations. You may reach age 90 someday, or maybe even reach 100. Do you have enough money set aside to last that long?

Remember Social Security is only meant to replace 20% of income. Waiting to find out when you have 80 candles on the birthday cake is too late. Meet with a financial professional to review your retirement investment level now to decide if you are on track or need to save more.

Financial health checkup step #2: Do the scales show you have fat debt?

Doctors are concerned about excess weight because it can contribute to health issues. When it comes to your financial health, excess debt makes it hard for you to reach your financial goals.

Just think of all the things you could do if you shed all your debt and your debt payments could be repurposed to increase retirement investing, such as pay for your children’s college, save up for a down payment on a home, or make major purchases with cash.

Financial health checkup step #3: Do you have plans for your money if you died?

Doctors usually ask if you have a living will and advanced health care directive. They need to know what to do if you are unable to make health care decisions for yourself.

Your money deserves the same attention by having a last will and testament. About half of Americans do not have one. It is not fair to your loved ones to figure out what to do with your estate after you pass on. For simple needs, many people can find a state-specific will online and even a lawyer-prepared will is worth the price if it makes managing your estate easier for your family.

Financial health checkup step #4: Watch measurements that check if your money is healthy.

Doctors can check your heart rate, blood pressure, cholesterol levels, and other factors to monitor the health of your body. You can check similar numbers to assess the health of your money.

This includes things like your credit score, the amount you are earning on your investments, the balance level in your checking and savings accounts, the amount of interest you are paying on borrowings, and the amount of money you are paying in fees such as overdrafts.

These numbers can tell you a lot about the health of your money and hopefully give you directions on what to do to make things better. 

Financial health checkup step #5: Your money needs to be insured just like your body.

It is no fun paying big money for health insurance, but it can make a major difference if you need hospitalization or develop a chronic health condition. It also makes sense to get adequate insurance for your house or apartment as well as your car.

Without insurance, a catastrophic event could wipe out all your money. It is a good idea to check each year to see if your coverages have kept up with the value of the property you are insuring.

Financial health checkup step #6: Your money needs to be immunized from harmful bugs.

People regularly get shots to keep bad things from happening to their body. Your money also needs help avoiding plagues like identity theft and fraud.

Make sure you are using tools like the Zions Bank Mobile Card Fraud Alert Service, which can send you a text message related to suspicious use of your Zions Bank credit or debit card. Become familiar with phishing and other techniques fraudsters use to separate you from your money.

Financial health checkup step #7: Your money needs to exercise and watch its diet.

Your doctor is going to discuss how a healthy diet and regular exercise keep you healthy. Your money can also stay in great shape with regular budgeting and a focus on a healthy emergency fund.

Not having a budget is like not watching what you eat — it can leave you in terrible shape. When you keep to a budget, you can set aside some of the money you don’t spend and build an emergency fund. Emergency funds are like a great immune system for your money. When your money has a crisis, you can draw on the emergency fund to help make things better.

Avoiding a checkup because you fear there is bad news is not a good plan for success. Better to endure that checkup and take your medicine to get better. The good thing is that if you use a checkup to make changes to improve, your next checkup will be a more pleasant experience. Your money deserves to be treated well so it lasts you a long time and stays in great shape.

Looking for somewhere to keep your emergency fund? Visit with a banker at your local Zions Bank branch to learn about the different savings accounts* and direct deposit options.

*Please refer to the Deposit Account Agreement, Account Disclosure, Deposit Rate Sheet and Personal Account Schedule of Fees available in the Zions Bank Agreement Center.

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