The end of the year is a great time to assess your financial health and make adjustments for the year ahead.
Just as regular health checkups help you stay physically well, reviewing your finances can reveal important insights to keep you on track financially.
Here are some questions to ask yourself as you review your financial well-being and plan for the year ahead.
Financial health checkup step #1: Will your money last as long as you do?
People are living longer than ever, and your financial resources should last as long as you do. Social Security typically replaces only about 40% of income, so it’s wise to meet with a financial professional now to figure out if you’re on track or need to save more.
Financial health checkup step #2: Do the scales show you have unhealthy debt?
Carrying too much debt can weigh down your financial goals. Imagine the possibilities if you shed all your debt and redirected those dollars toward savings or investments, such as retirement, college fund, save up for a down payment on a home, or make major purchases with cash.
Financial health checkup step #3: Do you have a plan for your money after you’re gone?
Doctors often 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 finances deserve the same attention. A last will and testament ensures your loved ones aren’t left guessing about what to do with your estate. Yet, about half of Americans don’t have one. For simple needs, many people can use a state-specific online template. For more complex situations, a lawyer-prepared will is worth the investment if it can save your family stress and confusion later.
Financial health checkup step #4: What do the numbers reveal about your financial health?
Doctors monitor heart rate, blood pressure and cholesterol to gauge physical health. You can do something similar for your money. To assess your financial health, look at key indicators including your credit score, investment returns, checking and savings account balances and interest rates on loans.
These numbers can tell you where you stand and point to areas of improvement, much like a medical checkup.
Financial health checkup step #5: Are you shielding your wealth the way you shield your health?
Health insurance can feel expensive, but it can make a major difference if you need hospitalization or develop a chronic health condition. The same principle applies to your assets. Make sure your home, car, and other valuables are adequately insured.
Review your coverage annually to ensure it matches the current value of what you’re protecting. Without insurance, one unexpected event could wipe out years of financial progress. Review your policies annually to make sure they align with the value of the property you are insuring.
Financial health checkup step #6: Are you protecting your money from harmful threats?
Just as you take steps to keep your body safe from illness, your finances need protection from risks like identity theft and fraud. Use tools like the Zions Bank Mobile Card Fraud Alert Service, which sends 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: Do you have a plan to keep your finances in shape?
Not having a budget is like ignoring your diet — it can leave you in terrible shape. A well-planned budget helps you control spending and set aside savings, which can grow into an emergency fund. Think of that fund as your financial safety net: when unexpected expenses arise, it’s there to keep you steady and prevent a crisis from derailing your goals.
Avoid skipping your financial checkup out of fear. The sooner you make improvements, the better your next review will feel.
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.