Individual in financial distress[photo/standardmedia.co.ke]How often do you go for a doctor’s appointment for a check-up? Often, right? But how often do you check on your financial health? Probably not as often, yet knowing your financial health is equally as important.
Just as you are responsible when it comes to your physical health, you need to be as prudent when it comes to your financial health. Besides, the two are often related, but that's a story for another day.
How do you know you are financially sound? Just what symptoms should you look out for? It’s only when you identify the symptoms and cause of sickness in your financial health that you can begin seeking a remedy. Here are some practical and simple ways to evaluate your financial health.
Net worth
Net worth is not as complicated as it may sound. It’s simply your assets minus liabilities. This pretty much summarizes all the financial decisions that you have ever made throughout your lifetime.
You can assess your financial health by monitoring your net worth over time. Is it changing for the better or for the worse? Your net worth reflects the performance of your investments as well as your spending habits.
Online Questionnaires
Some even help in calculating your debt to income ratio and end by giving tips on just what is driving your financial health and how to improve. Interactive playful tools make it fun and less ‘serious’, all while helping you move in the right direction.
The Changes
Just as situations in life are fluid, so are financial situations. As you go through the motions of the different developmental stages in life, therein comes new responsibilities which often have financial consequences.