7 Financial Health Check Tips
Updated: May 19, 2022
How’s your financial health? Your financial health check can be completed quickly and easily by asking yourself the following questions and answering honestly.
If any of your answers are no, then you should read on to find out how to improve your financial health now.
1) Create a Monthly Budget
If you’re feeling out of control with your finances, making a financial health check is a good place to start. By knowing exactly how much money you have coming in and going out, you can decide how to prioritize spending on things that matter (like groceries) versus those that don’t (like ordering in).
If you’re looking for help getting started or need to make a change along the way, there are plenty of tools available online—or try our step-by-step guide to creating a monthly budget .
You can easily set up an account using your mobile phone—just look for Wallet on our app. Downloading it is free! And if you do run into problems, our robust customer service team is here to help.
2) Get rid of credit card debt
If you have more than one credit card, pay down your highest-interest debt first. (You may also be able to save money with balance transfer offers that allow you to move high-interest debt onto a new card at 0% for 12 months.)
With a little time and effort, you can eliminate most—if not all—of your credit card debt. This can improve your financial health check in many ways: You'll save on interest payments, allowing you to spend less on finance charges and freeing up more cash to build wealth.
Also, paying off debt can help boost your score with a few different credit reporting agencies—not bad for something that takes just minutes each month! So what are you waiting for? Start whittling away at that outstanding balance!
3) Save at least 10%
Putting away 10% of your income will ensure that you're prepared for unforeseen events, such as an illness or a layoff. If it seems impossible to save 10% of your paycheck, do what you can, starting with 1%.
Then increase it by 1% every few months until you hit your goal. Track where every dollar goes in order to make sure you're spending money on what's important and cutting costs where necessary.
Also, never carry a credit card balance; pay off your bill every month so that you won't be paying hefty interest fees and helping yourself stay in financial health check .
4) Contribute to an Emergency Fund
The emergency fund is one of those financial goals that doesn’t sound sexy, but it makes a huge difference in your overall financial health. If you can afford it, set aside three to six months’ worth of living expenses in a high-yield savings account.
Once that goal is met, you can choose other savings options or investments to help grow your cash stash even more. Remember: You never know when something unexpected might happen—like getting laid off from work—and having a cushion means less stress and less chances for poor decision making.
5) Break free from payday loans
Payday loans are high-interest, short-term loans that can quickly turn into a downward financial spiral. The average payday loan borrower ends up paying over $520 in interest and fees on a $300 two-week loan.
Payday loans should be avoided altogether as they carry enormous hidden costs. However, if you find yourself stuck with one, try to get a personal loan from your bank or credit union instead; these loans will have lower interest rates and fees than payday loans. Also look for longer repayment terms that help bring down your monthly payments.
6) Use your car properly
You're a slave to your car if you use it as an everyday way to get around. Not only does driving yourself everywhere mean you'll spend more on gas and insurance, but driving also robs you of hours that could be spent working towards building wealth.
Find alternate ways to get around (bicycle or walking) at least some of the time so that you can make better financial choices with your money in other areas.
As an added bonus, bicycling and walking aren't just good for your finances—they're great for your health too!
7) Be smart with money online
Don’t forget to consider how your finances will be affected by opening an online business. Can you afford for it to fail? Will a lack of savings become a problem?
Are you in control of your own finances and debt, or are you regularly overdrawn and struggling to pay bills on time? If money management is proving to be an issue, seek help.
There are lots of services available that can support you in getting back on track with your debts and finances; many offer free advice or have low-cost options.
You might also want to consider getting professional financial advice if things don’t seem right—things like investments, insurance or banking shouldn’t all be done alone. Start with someone trustworthy and who has knowledge specific to your circumstances.
Financial Health Check Tips - The Bottom Line
There are a lot of ways to take control of your money, which is obviously something you should be doing.
Here are 14 things that are non-negotiable to keep you on track:
1. Create and Follow a Budget
2. Make Your Money Work For You
3. Stay Current on Your Debts
4. Know Where You Stand Financially
5. Give Yourself an Allowance
6. Save for College
7. Have Emergency Savings
8. Don’t Stop Learning About Finances
9. Seek Advice When Needed
10. Develop Good Spending Habits
11. Develop Good Saving Habits
12. Ask Questions
13. Find Your Personal Style
14. Find a Plan That Works For You