When you think about your health, what comes to mind? Most people will automatically jump to physical, mental and emotional health―but what about financial? Health is multi-faceted, and all sides are linked to each other. When one side is slipping, it tends to affect the others as well.
If you feel like your financial health is slipping, you’re not alone. According to a study done by Capital One and Credit Canada, 30% of Canadians said their financial stress was a bigger concern to them than their overall health.
Just like you do with your yearly physicals, it’s important to schedule in financial check-ups. Setting some time aside once a year (at least!) to assess your finances and re-calibrate certain areas of your money will not only benefit your financial well-being, but your overall well-being as well. Take this as an opportunity to review how you’ve done financially this past year and ensure you’re still on the right path to achieving your financial goals.
So how do you conduct a financial check-up? Easy!
Step 1) Identify your goals for the next 12 months
Just like anything in life, goals can change over time. You accomplish some, put others to the side and make new ones. Take this first step to evaluate the goals you had in the past and rework them to reflect your new goals for the future.
Step 2) Consider any changes
Did you have any changes take place this past year or do you expect any big changes to take place this year? These changes can be unfortunate (like unemployment, divorce, illness, etc.) or happy ones (like a new job, promotion, new baby, sending your child to college, retirement, etc.). Whatever changes you had or will be having in your personal life, make sure to consider them before looking at your budget.
Step 3) Evaluate your budget
If you haven’t made a budget yet, now’s the time. A good budget is truly the foundation for a solid financial well-being. If you already have a budget, this step will be a little bit easier. While you should ideally be reviewing your budget every month or so, we understand life can get busy and things fall to the wayside. This financial check-up is a good time to review your current budget and make any revisions to it to reflect this upcoming year’s changes and goals.
Step 4) Evaluate your debts
How have you been at chipping away at your debt? If you haven’t been doing as well as you’d like, now’s the time to identify where those gaps are and find a way to fix them. And remember, if you need help to tackle your debt, contact us! One of our experienced, unbiased counsellors can assess your financial situation and walk you through your debt repayment options―including the federally-legislated Orderly Payment of Debts (OPD) program.
Step 5) Look over your emergency funds
If you had to pay for an emergency today, could you do it? Don’t underestimate the importance of a good emergency fund! While the dream is to always have six months of savings in there, that’s not always obtainable. Start by having at least 90 days of savings to cover any emergency that pops up.
Step 6) Review your retirement
It doesn’t matter what age you are―planning for retirement is crucial. Ensure at this time that your retirement savings are in line with your retirement goals. Are you contributing as much as you possibly can? If not, find out where you can contribute more and then make a plan to do this going forward.
After completing your financial check-in, you may realize that you aren’t on top of everything like you’d originally thought. That’s okay! Luckily, there are so many great resources to help you gain a better insight on your financials―and many of them are on this website!
- Complete as many FREE online courses as you like. We have a variety of financial courses to go through all ranging in topics from “Budget Boot Camp,” “How to Financially Survive a Layoff,” “Tackle Debt” and “Financial Planning Closer to Retirement.”
- Fill in one of our FREE youth and adult spending plan forms to help you stay on track
- Read through our FREE Credit Comeback handbook
- See how your money adds up with our FREE financial calculators
- Create a budget with the help of our FREE Stretch Your Dollars workbook
And lastly, remember―it’s okay to ask for help! Whether you’d like to look at your debt repayment options or simply want to talk to someone about your budget and financial goals, our counsellors are here for you. Contact usto make an appointment. Together, we can get your financial health back on track!
FAQs
A financial checkup looks at the current state of your finances to determine what kind of shape they are in and whether you need to make any changes in how you're handling them to stay on track.
What is a financial check-up? ›
A financial checkup is about making sure you're meeting your own personal benchmarks. That said, you can feel confident that your money is trending in a healthy direction if: Your spending is generally within your budget. Your credit score is improving. You know how you'd pay for an emergency expense.
Why is it important to monitor your finances? ›
Tracking your spending can help you manage your money well and make progress towards your goals. When you know where each dollar is going, you're more empowered to make changes to your cash flow. You'll also have a good understanding of how much you're able to save toward new financial goals.
Are regular financial health checkups as important as annual physicals? ›
A financial check-up is as important as an annual physical with your doctor. Like a medical exam, a review of your finances can identify strategies to improve “financial fitness” and screen for potential problems, such as a high debt-to-income ratio.
Why is financial wellness important? ›
Prioritizing Financial Wellbeing can lead to more positive employee experiences. Financially well employees will be more engaged, present and productive. Financially healthier employees tend to have higher morale and job satisfaction leading to lower rates of turnover.
Why do companies do a financial check? ›
Many employers, especially when hiring for positions that include financial management, perform credit checks on job candidates before making employment offers. Employers may use credit report information to verify an applicant's identity and to look for signs of excessive debt or past financial mismanagement.
How often should you do a financial checkup? ›
How often should I have a financial health checkup? At least once a year and whenever you have big life changes like starting a new job, getting married and having children.
Why is financial monitoring important? ›
An essential component of financial management is a regular financial review of activity to identify errors, anomalies, potential compliance issues, and significant budget variances.
Why is it important to be financially aware? ›
Financial literacy is important because it supports financial well-being, or a confidence in your ability to manage your money well. Everyone experiences financial ups and downs, but financially literate people may be more likely to: Manage money with a budget. Save more money for the future.
Why is it important to review your finances? ›
An annual review provides you and your Financial Advisor the opportunity to take an in-depth look at your goals, and prioritize what matters most. Together, you can begin to estimate the cost of these goals, and determine whether you're on track to achieving them or need to identify ways to catch-up.
Leading doctors and medical groups have called the annual physical exam "not necessary" in generally healthy people. Exercising, keeping a healthy weight, and not smoking are enough to keep most of us in good health, with or without an annual exam.
How many checkups should you have a year? ›
The American Academy of Family Physicians (AAFP) recommends that people have a checkup at least once every year. However, some people may need to see their physician more often, depending on their health status.
What is the importance of having a yearly wellness check? ›
Your annual preventive health exam (aka well visit or annual physical) is scheduled with your primary care physician to catch potential health issues early, before they become serious, and to help you focus on wellness and a healthy lifestyle while identifying important screening tests, vaccinations and other necessary ...
Which is the most important measure of one's financial wellness? ›
1. Check your credit score. Because it shows lenders how well you handle and pay back debt, your credit score is a solid indicator of your overall financial wellness.
Why is financial fitness important? ›
Ultimately, achieving financial fitness means you make informed financial choices that increase your wellbeing and support your life goals.
What is the financial importance in healthcare? ›
One of the most important topics in healthcare management overall is financial management. Financial management encompasses duties such as: Managing/improving payment processes. Administrators can help patients determine how they will pay for healthcare services.
What is checked in a financial check? ›
As part of a credit check, companies may look at whether you've paid back your credit on time, how much credit you currently have and how you're managing it. They may also look at any financial associations you may have (such as someone you share a bank account or mortgage with) and what their credit history is.
Is a financial check the same as a credit check? ›
Financial checks will be run against publicly available records, for example, county court judgment records and bankruptcy filings and orders. These checks do not involve looking at an individual's credit score.
What is a financial health check? ›
A financial health check is one which takes a holistic review of your personal finances and financial situation. The idea is to help you better understand how you are managing your money and whether you are on track to achieve any financial goals that you have set – and if not, where changes need to be made.
What is a financial statement check? ›
It is used by lenders and investors to check a business's financial health and earnings potential. Financial statements can cover any period of time, although they're most commonly prepared at the end of a month, a quarter, or a year.
