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The Importance of a Yearly Financial Checkup

2021-12-13

The Importance of a Yearly Financial Checkup

As a current servicemember or a Veteran, you understand the importance of maintaining your physical health. The military held you to certain standards when it came to strength and stamina, and just like your physical health, your financial health is equally vital.

Look at it this way — if your finances had to pass a PT test, would they “bust tape” or would they pass with flying colors? Even if no one is holding you to regular evaluations and assessments of your money, when it comes to protecting your family and securing your legacy, it takes healthy finances. Are yours up to the test? If you don’t know, it’s time for a checkup.

Whether your last medical appointment was for preventative care or to diagnose an issue, a series of questions and tests were run to make an accurate assessment of your physical health. This snapshot helped devise a plan for your optimal physical health moving forward.

When was your last financial checkup? Much like your physical health, it’s essential that you are aware of your financial well-being to determine what adjustments are necessary to stay on track. Just like with our bodies, to ensure we are living our best life and propelling toward our goals, it’s vital that we have a clear knowledge and understanding of our level of financial wellness. Where do you start?

Healthy Wealth — What to Consider

Here are some factors to scrutinize when conducting your financial checkup:

  • Income
  • Expenses
  • Assets
  • Liabilities
  • Debt
  • Savings
  • Emergency fund
  • Investments
  • Risk number
  • Retirement
  • Insurance
  • Long-term care
  • Educational funding
  • Net worth
  • Overall future financial goals

The Picture of Financial Health

If your finances are in “fighting shape,” you will have a steady cash flow, predictable expenses, and a healthy return on your investments. Additionally, you’ll hold accounts with compounding interest that continue to grow passively.

Financial health means you’re funding your lifestyle goals whether it’s contributing regularly to your dream retirement, gifting money to your grandchildren’s educational fund, acquiring assets that will appreciate, and having enough set aside to cover the unexpected. You have a healthy income-to-debt ratio and you’re not losing money to automatic debits for services you don’t use. Your spending and saving habits are calculated, not impulsive.

Reevaluating Life Stages and Goals

When conducting your financial wellness checkup, you may find that all the numbers add up and your wealth is growing — congratulations! If that is the case, there are a couple of questions you need to ask yourself: Should you stay the course with your current strategy or reevaluate your methods? Does your plan match where you are today and where you want to be in the future, or should it be fine-tuned?

Here are some life events that may necessitate a strategy revamp:

  • Military transition
  • Full retirement
  • Marriage or divorce
  • New grandchildren
  • Buying and selling property
  • Illness or hospitalization
  • Receiving an inheritance
  • Having a family member in long-term care
  • Losing a family member

Get Financially Fit with AWM&T

If these lists are overwhelming, we have good news — you don’t have to go it alone. Just like your medical professionals, our team of military financial experts with AAFMAA Wealth Management & Trust (AWM&T) can assist with your financial checkup.

Whether you’re looking for a complimentary portfolio review, a financial plan, a risk tolerance assessment, assistance with your investment strategy, or trust services, our military wealth management experts are ready to serve you. Contact us today to set up an appointment with a Relationship Manager who can assess your financial health and customize a personalized action plan. Here’s to a healthy, wealthy year!