There are usually clear signs if we are ill and that prompts us to see a doctor. When our car isn’t running right, we take it to a repair shop. Financial health is critical too! You could be financially sick and not know it until it’s too late. The good news is that there are several things you can do to “self-inspect” to determine your financial condition.
What is ‘Financial Health?’
Before we take a peek at determining financial health, what exactly does it mean? According to Investopedia:
“Financial Health is a term used to describe the state of one’s personal financial situation.”
The key word there is ‘personal,’ indicating that everyone will have a different snapshot of what their personal finances look like. Such a snapshot should include a wide cross-section of measurements across all the areas of your personal finances, including cash position, debts, home equity, insurance, investing, as well as tax and estate planning.
Understanding YOUR Financial Health
The best way to fully understand your financial health is to develop a comprehensive financial plan that covers all the basics of your personal finances. In developing such a plan, you will establish goals and develop financial strategies to meet those goals. In the financial planning process, you will also uncover a number of financial indicators (numbers) that can give you indications of how you are doing in certain areas, such as your emergency funds or retirement savings.
Developing a financial plan takes a lot of work and usually requires the assistance of a professional financial planner. However, there are several things you can do to help get the process started.
To help you get started, we have developed our latest report “25 Key Financial Stats for Tracking Your Financial Health.” This document can help you identify the financial indicators (numbers) that are important to your financial health. This is a MUST HAVE report that is available to you at no charge. You can refer to this document over your entire lifetime to perform a checkup on your financial health anytime you need to do so, especially when life events occur such as marriage, the birth of a child, or retirement.
In the report, we give you the information and knowledge that you and your family need, including the basic formulas on how to calculate the numbers.
We also recognize that not everyone is a self-learner and may need some help to perform the calculations. For a reasonable cost, there is also an option to have a Financial Health Summary created for you by a professional financial planner. This is a Financial Health sample report if we do the work for you.
Why Financial Health is Important
Knowing your financial numbers is like ‘preventative medicine’ for your financial health. A couple of examples include:
- Knowing where you stand with your debt to income ratio can be an indicator if you are over-leveraged
- Understanding your cash position can help you determine how much you can reasonably invest without impacting your emergency savings
- Knowing your tax bracket can help you determine your tax liability for the coming year
If you are like most people, it’s a dreaded effort to sit down with a calculator and crunch out some numbers, if you have time and if you know what numbers you are crunching for! Our report helps break this down into logical steps within each of the following financial planning areas:
- Cash Planning
- Risk Management (Insurance Planning)
- Retirement Planning
- Education Planning
- Tax Planning
Actions You Can Take
The first step is to simply download the report from our website, financial stats. Getting the information is key to diagnosing your current condition. Calculating the numbers that are pertinent to your specific situation is the second step. The third step is to analyze the numbers and determine what can strategies can be put in place to meet your overall goals and objectives.
If you need help with any of this, especially the third step, your financial planner should be able to assist. If you don’t have a qualified financial planner, seek one out. It is well worth the investment. If you are concerned about a financial advisor selling you products, seek out a fee-only advisor. They will only charge you for the service for the analysis and their advice.
When seeking out a financial advisor, ask a lot of questions about their compensation. You have a right to know about and understand any products they are selling and any conflicts of interest. If your advisor is compensated based on what financial products you buy, make sure you understand and are comfortable with that arrangement.
About Kastler Financial Planning
Our core purpose is to improve the financial life for each and every client we serve. We believe that people of all income levels should have access to affordable and professional financial planning and investment management services, without the pressure or bias of product sales and commissions. Always acting as a fiduciary, the only fee we receive is the fee paid by the client. We put your best interest before our own. No product sales, no commissions, and no account minimums.
We specialize in family planning, families with Special Needs Planning, Retirement Planning, Retirement Tax Planning, and Small Business Retirement Plan Consulting. Our services are analytical and will be appreciated by the engineering and technical-minded individuals. We also use “bubble up” reports for the not-so-technically minded.
Our services can be performed either as hourly, a one-time fee-only project, or as On-Going Financial Planning, depending on your needs. Compare our fee-only services. Our suite of services also include Investment Management Services with the options of % AUM or flat-fee portfolio management.
We aim for a pleasant client experience whether you are in our office or remote across the country through computer screen sharing technology. Visit our Client Portal to learn how to get started with a complimentary ‘Get Acquainted’ meeting.
If you have any question on how our services may apply to you, please contact me at the number below or submit an email through our Contact Us form.
© 2018 All Rights Reserved
Kastler Financial Planning | Ortonville, MI 48462