Figure Out Your Financial Health With These Essential Questions
According to nerdwallet.com the majority of Americans don’t ever bother to check in on their financial health. It’s a staggering statistic, given the state of the nation’s personal finances. More people are in more debt than ever before, and yet personal financial health doesn’t seem to be at the top of most people’s agenda.
Those that do investigate the state of their financial health tend to focus exclusively on one measure or another. They’ll look at their income or their retirement account and assume that, just because one area is going well, that everything must be fine.
But is this the right approach? Almost certainly not. Here are the questions you really need to ask yourself to figure out whether you’re in good financial health.
Could You Pay $1500 Up Front For An Unexpected Bill?
Unexpected bills are an unfortunate part of life. And while they’re relatively rare, they can and do affect millions of families every year. The biggest cause of unexpected bills is your motor vehicle, followed closely by medical expenses. Money might be coming in at a healthy rate, but could your family afford to pay a one-off $1500 bill?
If you couldn’t, then there’s a good chance that you rate highly on the financial fragility scale. Just a small change in your income could have massive repercussions for your quality of life. You could find yourself having to move home or worse.
Is Your Credit Score Above 750?
Most Americans don’t check their credit score until they try to take out a loan. Then, when they are rejected on the basis of a poor rating, they immediately try to take out loans with other lenders, hoping that one of them will give them the credit they need. What they don’t realize is that just the act of applying for many loans in succession can hammer their credit rating. Before they know it, their credit score is in the doldrums.
The good news is that sites like creditrepairservices.co offer help to families struggling with poor credit scores. They provide information on different credit repair services: services which claim to help you fix your credit quickly, enabling you to get access to loans when you need them.
Do You Know How Much Money You Need For Retirement?
You know intuitively that you and your spouse need to save up a big chunk of money for retirement. But do you know how much exactly? For instance, do you know how much your pension would need to be worth to provide an income of $25000 a year every year after you retire?
It turns out that the majority of people don’t actually have a figure in mind. But knowing this number is essential if you are to work out how much money you need to save each year between now and retirement at a given interest rate.
Actually calculating this value is difficult so you might want to use an online savings calculator as well as a pension calculator to work out the figures involved.