How to Complete a Financial Checkup in One Weekend

Contrary to the recent study that states annual checkups are unnecessary if you’re healthy, I believe they’re critical.

Even for car owners, it’s strongly suggested that you take your car into the shop every quarter (or 3,000 miles) for an oil change. Often dealers and local mechanics will offer to do an evaluation (checkup) of your vehicle. Sometimes you get your car back in a couple of hours with an outline of potential issues and recommendations.

For me, I’d rather know there’s an issue on the horizong than not know, and get a big surprise in the middle of a long drive!

It’s the same for the body, which I’m keen on maintaining as well. I begin some time in May, with the hope to be done by the end of June. I call it my Checkup Season. I make appointments with my doctor, dentist, allergist, etc.

The main reason that I do it around this time every year is because June is my birthday month. (Did I mention that before? 🎂) That makes it easy to remember.

My why…the motivation behind my full-service, physical assessment is two-fold.

I've made a commitment to maintaining my health so that I could be like my grandmother. I want to see my great, great-grandchildren born like she did. Secondly, I believe that my life has purpose…I can’t fulfill that purpose without a healthy body to work through.

So, I have to keep tabs on how I’m doing, physically.

My “checkup season” extends to my finances also. But money requires a more frequent review. Ideally, monthly, quarterly, and biannual checkups would be great. I can't say that I'm always consistent with the monthly reviews.

When I do it, I set aside a couple of hours on a weekend and bag it out. This type of review keeps me aware of where I am and evaluate the distance between that location and my goals.

Here are steps to help you do a solid financial checkup. Do this type of review quarterly or biannually or during your birthday month. 😄

GET YOUR CREDIT REPORT AND SCORE

A credit report is a record of any debt accounts that you’ve had and how well you’ve managed them. It will include credit cards, loans, and other unpaid bills. And also personal information about you, such as current and previous addresses, and any alternate spellings of your name. Listed on it will be any lenders or businesses that have inquired about your credit in the past two years.

Credit bureaus use complex algorithms that weigh the elements of your credit report to calculate a score. This score is meant to represent your financial strength. Lenders use this number to quickly identify your credit worthiness.

NOTE: Any errors on your report will affect your score. Simply contact the credit bureau to correct mistakes, if any.

REVIEW YOUR BUDGET

Yes, I said it!

Budget is a dirty word to some people I know. I’ve heard everything from budgets feel constricting to they’re confusing. Some admit that they feel convicted by budgets.

There is NO SHAME here!

If you do not have a budget, that’s ok. Begin one today.

A budget is a tool to keep spending in check and to work toward goals, such as savings or a vacation.

Review your spending, line by line. If you hadn’t been tracking your spending, use your bank and credit card statements to piece together this financial puzzle. The picture will become clearer.

How much have you been spending on dining out? Entertainment? Clothing?

Then, look at your income. Has it increased since your last review? (Or in the last six months?) Has it decreased? Or it is the same? If your income has increased and your spending has decreased, then you have more money to apply to savings goals or debt repayment. If your income is the same or decreased, but your expenses have remained static, then you would review your spending to identify where to cut back.

Remember: This is just for a season.

This is the time when you also review your debt reduction plan. Are you on track in this area? Can you increase your repayments to wipe out the balance sooner?

LOOK AT YOUR INVESTMENTS

You may not be an investing guru like Warren Buffet. That is ok. I can definitely relate. I’m well versed in the management of money, budgeting, etc. However, when it comes to money growth, I am a novice. My husband is the money growth man.

He encourages me to at least look at how my money is allocated in my retirement accounts. For example, I recently examined my retirement funds allocation, and under the advisement of my resident money manager 😉, I made the decision to move my retirement fund into a vehicle that allowed me to control how my money would be invested.

Of course, this will be a steep learning curve for me. But I felt like I had to begin to make decisions that would stretch my understanding and potentially grow my resources exponentially.

CHECK YOUR INSURANCE COVERAGES

I admit this is one step that often gets put off in my house.

At least for most of our insurance needs…our auto policy is biannual. So, I end up evaluating it every six months. It’s our homeowners and life insurances that could use a more regular review.

We all need these insurances. However, insurance companies change their rates all the time. They do not always inform the insured. Before you know it, after several years, you could be paying much more for the same benefit. It’s important to keep comparing prices and premiums to ensure that you are not paying more than you need to for coverage.

REVIEW AND CONTRIBUTE TO A RETIREMENT PLAN

I feel like just yesterday I was turning 30 years old…I had so much time to do so much…

I'll be eligible to join AARP in a couple of years! How did THAT happen?

Retirement age will creep up on you too. Whether you decide to retire at 55, 65, or 75, you should contribute as much as you can to a retirement plan, for as long as you can.

If your employer has a plan, contribute the maximum amount possible for your current situation. If no plan exists where you work, open an IRA (Individual Retirement Account), traditional or Roth. Some contribute to IRAs in addition to their work retirement accounts.

Save toward your retirement goals.

CLARIFY YOUR GOALS

None of these steps will lead you toward financial success without being clear on your goals. They are the reason behind the checkup in the first place. Goals keep you motivated and help to focus your financial habits.

Look, I know there’s a lot here to take in. Here are your next steps: (1) Take out your calendar and schedule an appointment for your checkup. Give yourself a couple of hours on the weekend. Schedule it, like it’s an important meeting because it is! Determine that this is non-negotiable time. (2) When the day arrives, grab a cup of tea or coffee, and have at it.

This checkup will help to move you closer to the life you want to live. The more responsible you become in the managing the health of this area, the more you'll see its benefits in other areas of your life. 

Until the next time...

XO,

R