Financial Health: 8 Ways to Check

8 Ways to Check and/or Protect your Financial Health

Many of us see the doctor for an annual check-up.

Probably, even more of us have our car checked on a routine basis.

Few of us take a holistic view of our financial health, particularly, on a routine basis.

I encourage you to be an early adopter, change this, and become proactive with your financial health.

For our physical health, our doctor might check our weight, blood pressure/pulse, LDL/HDL and then compares the findings to our initial baseline results.

For our financial health, we should also establish a baseline /benchmark and then, periodically compare our results to our previous records,

How are we going to know how we are doing unless we take the time to look?

How are we going to tell if we are getting better if we don’t have an initial baseline to compare to?

The factors that you choose to use are up to you. My list includes possibilities for you to consider. Record your answers & date it. Some responses will result in a number, others will be a yes/no and perhaps initiate a new thought process. Here are my suggestions: 

  1. Determine your Personal Net Worth
  • Create a Balance Sheet: Assets = Liabilities & Equity
  • Assets are the value of what you own; liabilities are what you owe
  • Assets – Liabilities = Equity in a business or your personal Net Worth
  1. Review the Liability limits on your insurance policies (Homeowners, Renters, Auto, Business). Is the limit high enough to protect your Net Worth if something serious happened? You don’t want to leave your “assets” (money) exposed to risk of loss without making the conscious decision to do so.
  1. Cash Flow- Positive or Negative?
  • Money coming in, money going out, and when?
  • Is it steady through out the year or does it fluctuate?
  • Are you spending more than you bring in?
  1. Liquidity – Emergency Fund +
  • Emergency Fund savings for 3-6 months of living expenses?
  • Any other “reserves” you keep – Christmas or vacation fund?
  1. Your Personal Savings rate
  • Do you try to pay yourself first?
  • Are “you” built into your required monthly expenses?
  • Do you fully participate in your company’s matching program?
  1. Determine your Debt/Income Ratio
  • Lenders use this to determine your ability to manage payments
  • Total monthly debt payment/monthly gross income
  • 43% is generally the maximum for a Qualified Mortgage as per Consumer Finance
  1. Review your Retirement Allocations
  • Does it make sense?
  • Is it balanced?
  • Are you earning a return? 
  1. Check your credit score – It is your Financial Reputation
  • Obtain your free annual credit report from each of the 3 major reporting agencies, check it for accuracy, and dispute anything that is not correct
  • Obtain your FICO score

Taking the time to manage our money provides benefits:

  • Feeling in control
  • Knowing our capacity to absorb financial shocks
  • Finding if we are on track to meet our financial goals or
  • Having peace of mind and the flexibility to make choices

The road to financial freedom is full of potholes. If you take the time to discover, find, and fix them, your trip will be less eventful and you will reach your destination faster & safer.

May you have a safe, prosperous, and fulfilling journey.

Thanks for the reading!

Deb

P.S. I welcome and encourage comments and questions. It is one way to see how I am doing. 

Deborah Ann Fox, CPA is working to make a difference in peoples lives by helping them build and protect their financial health. She offers free 30 minute, no obligation consultations and is available for appointments – including remote. More information is available at http://www.DeborahFoxCPA.com. Questions or comments can be sent to debfoxfinancial@gmail.com.

Financial Success: Life Lessons for all Ages & Stages – Part 1

 Featured Image -- 373

To celebrate the beginning of April’s Financial Literacy month, I thought I would create a series of blogs about money & financial literacy. I am starting at the beginning, when kids are young & will continue through some of the older ages & stages of life.

Part 1: Kids learn by what they see, hear, & do:

 When my niece, Ali, was 4, she used to think money came out of a machine. It made sense, she saw her Mom do it. If you want something, you just go to the machine, get the money, & go to the store. If we don’t tell them any different, kids believe what they see – money comes from a machine.

Little ones quickly learn that they need money to buy things. They need to be taught:

  • You earn money by working
  • You deposit the money you earn in a bank to keep it safe
  • You have to have money to pay for things you need – a place to sleep, food to eat, clothes to wear, maybe, even a car to go places
  • You use money you saved in the bank to pay for things you need
  • There is a difference between needs & wants – needs come 1st
  • You usually have to save money to buy something you want

Kids learn from what they hear. Do you speak positively or negatively about money?

Most of us know that kids are like little sponges & pick up on things they hear & sometimes they repeat us to our surprise (or shock): “We don’t answer the phone at our house, it might be a bill collector”. As adults, we need to be careful with our words. We also need to pay attention to other places that kids can learn by listening – TV, video games, radio, private & public places.

In today’s digital world there are so many ways to educate our kids about money; we can play fun songs for them to hear and maybe learn. One of my favorites is Sammy Rabbit; hIs dream big campaign teaches great money habits for young children. You can learn more about Sammy at http://www.dreambigday.net or sammyrabbit.com.

Kids also learn by what they do. Teaching kids to be financially successful in life should begin early. The Davidson Institute reports that money behavior habits can be formed by age 7.   When we are young, it is hard to learn that we can’t have everything we want. Parents can help by creating incentives & providing rewards.

  • Have kids write goals & create visual savings charts for something “they want”
  • Tell them that writing goals down increases their chance of success
  • Practice “learning by doing”
  • Money earned or received can be divided into 3 groups – spend, save, give. Let them decide where to give.
  • Teach “delayed gratification” – this will provide a great leap forward to becoming financially capable & successful, later in life
  • The concept of “budget” can be taught with things other than money; i.e. 1 sugary item per day – they choose when. I used to tell my son, Jason, if you want sugar on your cereal in the morning, then please don’t ask for a cookie or something else later on in the day. He frequently decided to wait because he did not know what other choices there might be later. Till this day, he still does not care for sugar much and he learned to wait for what he wants. He also works for it.

If you want to teach your kids a little about saving money, tell them that one of the best things they can do with their money, is to save it. Start early & save often. Even a little bit saved, on a regular basis, can add up to much after time. It is like planting a seed and watching it grow. Money can do the same.

A Chinese Proverb is “Learning is a treasure that will follows its owner everywhere”. Learning to make smart financial decisions when you are young will also benefit you for life.

Have fun teaching & helping others learn to make smart financial decisions. Thanks for reading.

Deborah Ann Fox, CPA is a financial literacy advocate who devotes part of her practice to helping others make smart financial decisions by providing education while building client skill levels.  She is available for one on one, local, or remote appointments. Free 30 minute consultations.

website: http://www.debfoxfinancial.com

Phone: 619-549-2717

Band-Aids for the Heart, Mind & Soul

Red Crossed BandaidsBand-Aids have been around since 1920. Earle Dickson created them for his wife who frequently cut & burned herself while cooking. This “healing aid” is an American Icon. We all know the brand and most of us use it. It is great for life’s little physical injuries.

There are a lot of ways we can feel “injured’ or “hurt”. Sometimes, we are physically hurt. A Band-Aid may be all we need. Healing is fast & easy. Psychological & Emotional “injuries” are more difficult to heal. Band-Aids for those “hurts” don’t come as easy. We have to do some work to get past the hurt. Fortunately, there are some “Tools” we can use to help our growth and healing process.

Zing Ziegler said, “Getting knocked down in life is a given. Getting up and moving forward is a choice”.

History is full of those that supposedly failed and then became a huge success. We can use their stories or our own success to help us keep moving & growing. It gives us hope. We can Turn Our Scars in to Stars and our Wounds in to Wisdom.

Our attitude affects our viewpoint. Will life’s events boost you up or keep you down? Will your childhood or some other event keep you stuck living in the wake of the boat or will you use life’s events to propel your boat forward?

Life is not a straight line. It is a zigzag, always full of ups & downs. There is rain and then the rainbows.

Christmas is a time of hope. We hope for a happy holiday season. We hope for a happy & healthy tomorrow. Most of us hope for a New Year as good or better than we had this year.

Hope is wonderful; sometimes it is all we have as we try to hold on. Hope by itself, is not a good long-term financial or life strategy. We need more. We need to:

  • Accept what is
  • Decide to make a change
  • Act

With this in mind, I offer you my top 12 “Band-Aids “ for psychological & emotional health and wellbeing:

1. Realize that Circumstances happen to us; they do not define who we are, unless we let them:

  • Experience is part of our history and/or background; It is not who we really are
  • We are more than what has happened to us. We can carry “our story” as a burden or use it as springboard for growth
  • Use it as a Spring Board

2. We only “fail” if we stop trying:

  • Everything else can be viewed as gaining the experience or the wisdom we need to move closer to our goal or toward our dreams
  • Keep Moving

3. Know that you can “Come Back” from a tough year, relationship or financial loss:

  • Learn to Let Go of things that weigh you down
  • You need energy to make goals happen. Let Go of a past that drains you
  • Choose to let go of the weight so you can create the energy you need to grow, in your business, or in your personal life

4. Remember & Celebrate Your Past Success:

  • If you overcame an adversity or a difficult situation in the past, you already know you can do it again
  • Do it
  • Celebrate your past success by remembering them. Write them down & use the list as a supportive reminder if you have a bad day
  • Gather wisdom from past challenges to create a better you today

5. Try to Avoid “Problem Pile-up”:

  • If you have more than 1 area that could use an emotional or psychological Band-Aid, it is hard or almost impossible to heal a lot of hurts at one time
  • We can’t fix things when there is a big pile
  • Choose the most important now, and work on that one topic
  • Then choose the next most important item; keep going

6. Decide to leave negative thoughts behind:

  • Ants are “Automatic Negative Thoughts
  • Thoughts & Feelings can be fleeting
  • We decide to hold on or let them go
  • Choose to let the “ANT’s” go rather than let them run wild
  • Try not to let your unconscious mind be the master of your life
  • Choose Differently

7. Fuel your thoughts with Positivity:

  • Choose to think that life is good and it will be
  • Where thoughts go, energy flows
  • We become what we think about
  • Think positive. Be positive. Act positive

8. Determine your SMART goal. Write it down. Your goal should be:

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Time-Bound

9. Measure & Monitor Your Success:

  • Document your success and date it
  • Ask yourself, are my actions consistent with my vision, goals, and dreams?
  • Tell yourself, if I fall short, it won’t because of my actions. Remember, actions speak louder than words.
  • If your goal seems too big, decide to Either Step Up or Lower your Goal
  • Baby steps, any forward steps, count too

10. Consider Practicing The Four Agreements:

  • Consciously choose to be impeccable with your word, thoughts, & deeds – with yourself and with others
  • Avoid making assumptions
  • Avoid taking things personal
  • Always do your best

11. Though we might walk “through the valley of the darkness,” we are not supposed to “Camp There”:

  • Just like in life, a one -sized Band-Aid does not fit all wounds
  • Little hurts heal faster than big hurts
  • Big hurts can take more time to heal
  • Be kind to self and give yourself time

12. Change Your Mind Movie:

  • Change the Unconscious “Mind Movie” (the stories we have told to ourselves) to the Consciousness “Mind Movie” (the healthy story you want to tell about yourself).
  • Create a “Vision Board” or “Dream Board
  • The new visual can be based on who you are now or who you want to be in the future
  • Use PowerPoint to create your own Mind Movie. Add your favorite motivational song. Watch and enjoy.

I hope some of my favorite tools help you or yours find a sense of internal peace, health, happiness, and wellbeing.

Conversations are welcomed and encouraged. Life is about heart.

You Count and I Care.

Deb Fox is working to make a difference in peoples lives, hearts, and wallets by helping others protect their financial health and is available for side-by-side, remote, or mobile appointment. More information is available at www.debfoxfinancial.com. Questions or comments can be sent to debfoxfinancial@gmail.com. Thanks for reading

.