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Measuring our own financial fitness is scary. Why? Because it tells us about our own financial misdeeds. And exactly this is why measuring financial fitness becomes inevitable. They say- What gets measured gets Managed. So, to manage better, measure first
Doctors measure your Height, Weight, Blood Pressure, Blood Sugar etc. From the report, doctors understand more about your health. Then they treat you as per the findings in the report.
Similarly, there is something called as Financial Health Check-up. Financial Health check-up is a simple but very effective questionnaire. The participant is expected to answer the questions. Through these questions, important financial parameters are checked to understand whether or not you are
financially fit. Like various pathological tests a doctor prescribes, a financial planner measures certain important aspects about your financial health. The result is an enlightening document which helps you understand where you stand.
What are the factors a financial planner may look at?
It has a long range starting with basics such as –
This parameter help understand whether you are spending your income within the prescribed limits. This is a very basic action which has been reiterated by investment gurus like — Warren Buffet and also written in the books like “Richest Man in Babylon”.
Most financial products have terms and conditions which mentions
various charges, lock-in periods, exits loads, volatility, return guarantee. These are finely printed. Most of us don’t read them. You need an expert to understand the same.
Being organized pays in the long term. Most of our financial data and
documents are not well organized. We don’t get them whenever needed. This is a basic first step towards a great financial future.
Investment has to be tax effective. In case you pay taxes on your
investment returns, you may end up earning subdued returns. Tax efficient investment is a way forward.
Checks whether you are adequately investing for your life goals. I am
sure no one of us would want to land up having no money for the education of dear daughter.
The investments cannot be concentrated in a single asset class. That
can be risky. The questionnaire interestingly checks whether the investments are appropriately spread across suitable instruments.
We have listed only a few points above. It would be real exercise taking up the Financial Health Checkup. Life is a real exam. In this exam, we do well in some topics but we may miss on some other important topics. Take up this exam and you will understand have you fared in life so far. Who does not want to know the exam marks? This questionnaire is a terrific tool to start with. It helps perfectly understand whether your family is rightly placed in terms of personal finance.
Fill out this PDF.
This questionnaire has 20 questions. Each question has 5 rating parameters. So you need to rate each question for these options-I strongly
Agree — 5 points
I do Agree — 4 Points
I somewhat agree — 3 points
I don’t Agree — 2 points
I strongly don’t agree — 1 point
You need to choose your most relevant answer. Tick your natural choice so that you will get the perfect Financial Health Score Card. Be true to yourself. Once you are done with all the questions make a total of each column. Then add the total of each column together. This is your total score.
While advising our clients we ensure that we understand his Financial Life Stage along with the Financial Health. Each Financial Life Stage needs to be handled separately. Financial Health Score helps us understand the intensity of the implementation required. For now, take the Financial Health Checkup by clicking this link. It’s Free. This is your first step towards a bright tomorrow.
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