4 Financial Health Check-ups That Everyone Must Do (Before It’s Too Late)


Many of you are familiar with the importance of health check-ups. These cholesterol level checks, blood tests or even physical examinations have helped save many lives and detect many illness before they got out of hand.

What if there is a similar check-up for your financial health? How would you fair? Find out for yourself below!

Check 1: How Much Do You Spend?

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Do you know how much you spend? I cannot stop stressing the importance of keeping track of your spending. Not knowing how much you spend is like driving a car without a speedometer in it – reckless and dangerous.

There are many apps available out there to help you with budget tracking so there’s really no excuse for not doing it. Personally, I use the Money Lover app which is available both on Apple and Android platforms.

Check 2: How Much Do You Save?

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Did you know that 4 in 10 Singaporeans are not saving for retirement according to a recent survey done by HSBC? While most people think of savings as a chore, I imagine it to be the act of amassing my monetary troops. These troops would then be used to fight my “investment battles”.

That is why having savings is essentially the first step to investing. The more savings you have, the larger your army, the larger your “victory”.

Check 3: How Much Are You Insured For?

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Even though you often hear me extolling the virtues of savings, I never believed in the age old adage of “saving for a rainy day”. Surprised? Well, that is because I don’t believe in using my savings for rainy days.

Why should I when there is the option of insurance? You might be amazed to know that I personally don’t believe in paying for my medical bills.

In fact, you should never pay for your medical bills; you let your insurers do that for you!

Instead, you just pay them a small fee to ensure that they keep their promise to pay when the time comes. I often find that the premiums are much cheaper than the bills and so I prefer to pay the premiums, gladly.

Check 4: How Much Do You Invest?

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If you’re serious about beating inflation, you will have to invest. Everyone knows that. However, how much are you putting into your investments? The thing about investment is that it grows by percentage.

That means even if you are a talented investor that can produce a miraculous return of 50% annually, you will only have a meagre return of $500 if you invested $1,000 as capital.

In comparison, a person who diligently put his $10,000 capital to work can earn $1,000 even if he averages a modest 10% returns annually.

Some might think 10% return may be overly optimistic but such returns are often achieved easily by value investors who are using the same investment methodology as Warren Buffett.

The question is not whether if 10% returns is realistic or not, but rather, are you willing to start learning how to invest.

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Do you know of other ways to check your financial health?

Share with us in the comments below!

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