Financial Health Check 2020 – Part 2

We are good at going into the New Year with resolutions to be healthy and fit, but have you ever thought about doing a financial health check? Going into a New Year (and, of course, a New Decade) is a great time to analyse your Financial Health. Here are 8 questions to help you with your Financial Health Check (and a free budget planner spreadsheet download).
  • Do you spend less that you make?

This is where your household financial budget will come in.  You can see exactly what comes in and what goes out.  This is a great way to see where you can cut spending or what you can increase savings. 

  • Do you have manageable debt levels?

Debts should be managed as a priority, especially debts that come with interest.  Do you have a mortgage, is it at a manageable level?  What is the rate you are paying and if it is on a deal then when is that deal coming to an end?  Is it time to think about finding a new rate?  If you feel that your debts are hampering your ability to save any money, perhaps it’s a time to think about options; consolidations, switching products – it is best to talk to a professional about this. 

  • Check your credit report

This is a good thing to do annually for several reasons; it will identify any theft or fraud on your account (any accounts listed that you did not open should be investigated immediately).  Secondly, it’s not unusual for creditors to report incorrect information.  Finally, if you regularly review your score then this should pick up any errors.  Checking your credit score can help you to focus on repaying your debts on time. 

  • What are your long-term savings?

In this, we mean pension funds, savings for a deposit on a house etc, or perhaps you are saving for school fees or university fees?  These can be added into your budget and as a goal.  How much would you feel comfortable saving for these pots.  We have detailed some examples out in the Heritable Monthly Personal Pension, but you can add in your own too.

  • Do you pay your bills on time?

If you don’t because of low cash funds, then this is where your financial budget can help too.  If you know at the end of the month that certain bills are coming out and when they are coming out or when they will be due, you can budget that they are paid on time.  It’s well documented that our mental health and our finances are linked – stress can be caused by not paying bills on time (check out our blog post on Mental Health and Finances). Your budget will be a good tool to help with this.

  • Do you have enough emergency funds?

At Heritable we always recommend that you have three months’ salary as an emergency fund, but we also understand that this isn’t always manageable for everyone, so we would recommend that you have any emergency fund that you find possible.  Again, this is something that you can add to your budget.  Putting £100 into a savings fund a month is better than nothing and it could give you peace of mind should you need to use it. 

  • Do you have insurance?

It’s always an idea to budget for the worst-case scenario so it may be worth thinking about Income Protection and Life Insurance.

  • Do you plan a head financially?

This is where your goals come in.  When setting out your budget, if you set out realistic goals of what you want financially then you can work towards that during the year.  Is there a holiday that you are planning?  Add it to your budget.  Are you keen to start adding more to your pension?  Do you want to increase your savings?  Do you want to start investing?  Saving for a deposit on a house?  These are just a few ideas that you could add to your savings plan.  Everyone has their own personal set of circumstances, so everyone’s goals are different.

Honest answers to these questions will help you on your way to achieving your financial goals.  If you can commit to regular financial planning, then it helps you to stay in control of your money and plan your finances.  

Happy New Year and New Decade to you all and if you want to get in touch in the New Year about your finances and how we can help you you can contact us here


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