When you’re concerned about your health, monitoring your vital signs on a regular basis gives you valuable information about your body and provides an important snapshot for your doctor. Well, guess what? Taking the same approach when it comes to your financial health is essential if you are to properly manage your debts, monitor your investments and provide for your future.
Like monitoring your blood pressure, pulse, cholesterol and other crucial vital signs, spending an hour with your money at least once each week is a great way to stay connected with your current financial condition. Doing so also serves as a powerful psychological motivator – just the fact that you are involved and interested makes it much more likely that you will make progress toward your financial goals.
Like an annual physical, an end-of-year financial evaluation should include a look at your progress on debt repayment plans, especially those pesky and expensive credit cards, and a look at your investment strategy, including 401K contributions and current fund choices.
This is also a great time to check your credit score, which you for free once each year with each of the 3 main credit reporting agencies, Equifax, TransUnion and Experian. To do so, DO NOT go to freecreditreport.com, where you will find their trademark cheesy rock music and a credit monitoring service you don’t need. Instead, go to AnnualCreditReport.com, where you can learn about what goes into your credit score and what you can do to improve it.
In my next post, we will look at FICO scores, how they are determined, and how your financial decisions impact your score.
Until then, spend an hour each week with your money and check your financial vital signs frequently. You’ll be glad you did!