Measure your BMI (Being Money Intelligent) Scores before setting your financial health goals for 2019
The beginning of the year is the perfect time to do a financial health check-up before setting out your goals for getting financially fit. This means getting financially naked and digging down to the real nitty-gritty of your finances. It’s all about measuring those important BMI (Being Money Intelligent) scores and getting clear on what financial fitness goals you want to set for 2019!
These are the big 5 numbers you need to know to start your financial fitness journey;
Begin at the beginning – how financially fit are you now?
The starting point for everything is to know where you are starting from. Your Net Asset Value (“NAV”) measures how fit your finances are by looking at the amount of assets you have accumulated versus the amount of debt you have built up in your life. This is an empowering score to know because it puts you on the starting block for beginning your financial fitness journey. Your NAV may be looking a little unhealthy if your debt is greater than your assets, now is the perfect time to start eliminating that debt and working towards a positive NAV. Maybe your NAV is a healthy positive. Good for you! 2019 is your year for continuing your healthy habits and building more NAV!
Check out your financial Fitbit – your Credit Score!
Your credit score is your personal finance Fitbit. It measures how well you have been managing your finances. Lenders use this score to assess the likelihood you will pay back your debt. The higher your credit score, the more financially fit you are seen to be. Everyone has three different credit scores from the three major rating agencies in the UK; Equifax, Experian and Call Credit.
You are entitled to one free credit score per year from each agency, which means you can check your credit score for free three times per year and measure how your financial fitness is improving!
Measure how future proof your financial health is.
How much are you saving for retirement and how much you have saved to date are important. Equally important is knowing how much you want to have and are going to need when you retire. There are many useful tools online for calculating the pension pot you will need to retire financially healthy.
Take 5 minutes today to do an online search and get clear on what your number is. This is a big future goal and it is worthwhile getting familiar with it. You owe it to your future self to get your financial health in order to continue to live a good life! Make 2019 the year you maximise your pension pot contributions.
Get your financial cholesterol checked out
Have you been overindulging in unnecessary spending? Likelihood there are items in your regular and irregular spending that are not adding real value to your life. The only way to find out is to track your spending calories to get a sense of where you are mindlessly indulging in consumerism.
Try monitoring your money outflows for a week either manually or using an App like MINT. You may be surprised at how many money calories you could save yourself by getting clear on where your money is going!
Amp up your financial mileage
Evidence in many recent financial institution research articles is pointing to the fact that women are increasing their cash savings. It is good practise to hold up to six months equivalent of your basic expenses in an accessible savings account as a rainy day fund, however too much held in cash means you are missing out on the higher returns of the stock market.
The stock market is volatile and it is certain that it will go up and down. If you are accumulating money for the long term you have the time to ride out the rise and fall and amp up your NAV with some juicy returns. After the market crash in 2008, the subsequent cumulative 5 year return in the US was a not to be missed 178%!
Make 2019 the year you build up your six month emergency fund AND start a monthly investment practice!
What are your financial goals for 2019?