Financial Housekeeping: 10 Questions to Ask Yourself Before the New Year (+ Free Worksheet)

Financial Health Check

As the year is drawing to a close, it’s good to look back on the previous year to review what you have done, and how far you have come. So it’s time for some financial health check before the calendar year runs out.

This is particularly important when it comes to considering your career and financial situation, because understanding your current position — and what you want to achieve for the future — is an essential foundation for setting goals and success in the year ahead.

So let’s get started!

Financial Health Check: 10 Tips to Make It Happen

financial health check1. How Much Money Have I Made This Year?

Financial health check-up is key to financial success. Setting goals for the year ahead demands you know where you are right now.

So ask yourself first of all: how much money have I made? Add up your salary and other sources of income, and then deduct everything that you have spent.

Hopefully, you’ll be in the black, but if there is a hole in your personal balance sheet (i.e. you’ve spent more than you’ve earned), then you have already identified a goal or problem you need to rectify next year.

2. What State Are My Savings In?

If you do have savings, give them a financial health check to make sure they are working hard for you, earning interest or another form of return.

The interest rates on savings accounts change frequently, so if you realise your bank isn’t paying what it should be, one of your goals for the New Year should be to move your savings to a higher interest account or invest it.

If you have no savings yet, either for a rainy day or to contribute towards a big project (a deposit, a holiday, a wedding, etc.), think about how much you could afford to save each month, and where you want to deposit or invest it to get a good return.

Remember; never invest your emergency fund – it’s for emergencies and not for investing.

Related: How to Build an Emergency Fund You Can Be Proud Of

3. How Much Debt Do I Have?

Most of us have some form of debt. Some of it is good, low-cost debt, such as a mortgage or a student loan; and some of it is costly, and potentially damaging to our financial stability.

Payday loans, credit cards, and store cards might well fit into the bad debt category.

Whatever form of debt you have, it is important to understand how much debt you have, how much the repayments are, and when they are due, so you can create a plan to get out and stay on top of your debt..

Related: 5 Practical Tips for Managing Your Debt

4. What Is My Credit Score?

Your credit score dictates whether or not you can get credit, and how much it will cost you. It’s important to stay on top of your credit score and one great way to do that is to check your credit report at least once a year.

You can check your credit score for free with Experian, and they’ll also advise you which credit cards, loans, and other financial products you are likely to qualify for.

This is an excellent way to start, if one of your goals in the New Year is to reduce your debt or improve your credit score.

Related: Your Credit Score: How It Really Works and Why it is Important

5. Can I Make My Debt More Affordable?

If you know how much debt you have, what sort of debt it is, and your credit score, you’ll be in a stronger position to make your debt more affordable.

A regular financial health check-up can help you discover problems such as poor credit rating and high-interest debts that needs your urgent attention.

Look at the different products available on the market, see if there are any interest-free credit card deals available where you can consolidate credit card debt, or if you can take advantage of low-interest rate debt (such as a bank loan or overdraft) and use that to pay off higher interest credit and store cards.

Setting financial goals like this will bring down your monthly debt repayments, making your debt more affordable and manageable.

6. What Are My Worst Habits?

All of us have expensive bad habits, and sometimes it takes a bit of self-reflection to identify and face up to them. Look at yourself and your behaviour critically, or even ask a good friend.

If you are aware that you binge on nights out and clothes shopping as soon as your pay cheque comes in or you collect a new store card everywhere you go, changing some of these bad money habits for the better might become one of your goals for the New Year.

Related: 5 Money Habits to Develop Now

7. Am I Likely to Have Any Large Expenses Next Year?

Looking ahead is a good financial plan. What is on the horizon? If you know that you’ve committed to a holiday in May, or to moving in with friends in September, the time to start planning for it is now.

Add these costly outgoings to your calendar create a budget or spending plan and work out how much extra money you need to make or save in order to pay for them without taking on additional debt.

Related: How to Create a Spending Plan That’s in Alignment with Your Values

8. Where Do I Want To Be A Year From Now?

It’s easy to get caught up in daily life and not look up and forwards. But if you don’t dream, and don’t plan, you’re unlikely to make much progress.

Give yourself time now to think seriously about what you want to achieve, where you want to be a year from now.

  • Do you want a promotion?
  • Do you want to increase your salary? Or
  • Do you want to be running your own business?

If so, make it one of your goals for the New Year, and start planning how you are going to get there.

9. What Financial Goals Do I Have For The Year Ahead?

Even if you are happy in your job and with your salary, you can always improve your financial situation.

Setting goals to save more each month, reduce your debt, invest in yourself or learn how to invest your money more effectively will stand you in good stead, and you don’t need to wait until January to start!

10. What 3 Things Will I Do to Achieve My Goals in the New Year?

How are you doing? A regular financial health check is critical to achieving your financial goals. We’ll like to encourage you not just to think, but to act.

Answer each of our nine questions above, and then commit to answering and acting upon number 10. What three things will you do to make 2018 the Best Year Ever?

Give Yourself a quick Financial Health Check Today with our FREE worksheet. Click here to download your copy.

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