With 2020 just a few days away, it is a great time to review your personal finance.
Here are 7 key areas you must look into.
1. Assets, liabilities and net worth
Knowing your assets, liabilities and net worth is important, because if you don’t know what your current financial status is, you won’t know which areas you need to improve in.
2. Income and expenses
How do you become rich? The simplified answer is increase your income, reduce your expenses.
If you are a business owner or salesperson, brainstorm ways that could bring in more revenue for your company.
If you are an employee, think of how you can increase the value that you bring to your employer, and then you can potentially ask for a raise, or increase your chances of getting a promotion.
Find out what are the unnecessary expenses you can cut out? Perhaps that under-used gym membership or paid TV channel subscription?
3. Lifestyle preferences
Are you satisfied with your current lifestyle? If not, what are the areas you can improve in?
4. Insurance protection
How much insurance coverage do you have for premature death, disability, critical illness, hospitalization, and personal accidents?
Are your family members adequately covered?
5. Tolerance to risk
Are you taking too much or too little risk in your investments? Taking too much risk can lead to unnecessary stress and anxiety, while taking too little risk may mean you won’t reach your financial goals.
6. CPF and employee benefits
CPF and employee benefits can form a substantial part of our retirements funds. If you don’t know what your CPF account balance and employee benefits are, go find out.
7. Financial goals
There is a saying that if you fail to plan, you plan to fail.
For example, you want to buy a new property, but are you financially prepared for it?
Financial planning can be overwhelming if you don’t have the habit of reviewing your personal finances regularly, but it is absolutely essential if you want to achieve financial freedom.
Fortunately, financial planning doesn’t need to be difficult.
Seek help from your trusted FLA Organization Financial Planner and have him or her walk you through the process now. We look forward to making 2020 the most prosperous year for you!
