Three questions you need to consider when testing your financial fitness

It is no surprise that fitness goals account for a vast amount of New Year’s resolutions. What you might not know is that there is a correlation between physical and financial well-being.

Man in active wear with headphones and fitness watch.

That means financial fitness should not be overlooked when making your goals for the new year.

Financial fitness has many dimensions and like physical fitness it’s important to know your starting position and where you would like to get to. Like a physical trainer, a financial planner can put together a program to help you achieve your goals. Even if you do have a financial planner there are 3 questions you should ask yourself if you want to improve your financial fitness.

1. Do you have financial goals and, if you do, are you making progress towards achieving them?

The adage “if you fail to plan you plan to fail” may be cliché but when it comes to your finances it should be heeded. Setting financial goals is essential to financial fitness and success. An important part of goal setting is creating a plan with steps for achieving them to help you stay focused and on the right path. At a minimum, plans should be checked at the end of the calendar or financial year to ensure your goals are still appropriate for your circumstances and that you are on track to meet them. If not, you can course correct in a timely manner.

2. What kind of debt are you carrying?

Not all debt is equal. Good debt increases your net worth, enhances your life in an important way or has future value. Good debt can also help you generate income and includes investments into education, your own business and your home or real estate. Expensive debt with high interest rates, that is being used for discretionary expenses or items that lose value beyond the benefit they provide, is the type of debt that should be avoided.

3. When was the last time you reviewed your personal, property and practice finance?

As a doctor, you know the importance of regular physical health check-ups and the same is true for your financial health. Frequently reviewing your finances allows you to make adjustments to suit any changes to your personal or business circumstances or add new goals when necessary. This review should include a look into your current loan providers, the interest rates you are paying on your loans and any associated fees. Comparison of this information with other options available in the market will ensure you are receiving the best value for your needs and that you are on track to meet your financial goals.

If you want to start the new year on the right foot with your financial health, contact us today to ensure you obtain the right personal, practice and property finance. Even the smallest changes made due to a financial fitness review may help you to achieve your goals.