Your financial health too needs annual screening

ANNUAL medical health screening is important to pre-empt potential health issues before they happen or become life threatening.

Likewise, financial health screening is also as important to check on the health of our finances so that our life goals are well supported financially.

Let’s examine the key tests in our financial health screening.

1.The PiggyBank: Heart scan

Start with a “heart scan” to gauge how much fund is available to take care of unforeseen events such as job loss and medical emergency. Depending on your age and financial commitments,save up at least three to six months’ worth of regular expenses.

2.CashFlow Management: Blood count

Identifythe “latte factor” in your cash flow. Eliminate the little expenses you do not need, e.g. unused gym membership will increase your ability to save.

3.Debt Management: Cholesterollevel

Debt-to-Income ratio is one way to checkon the “cholesterol level” of your financial health. Your monthly debt obligation should not be more than 30%of your income. Always avoid having “bad cholesterol”, i.e. bad debts that are costly and not productive, e.g. credit card debts.

4.WealthCreation: Blood pressure

Do you save for your short and long-term life goals, e.g. marriage or retirement? What isthe “blood pressure” of your savings? It should be kept in portfolios which grow in order to generate a weighted-average return that is aligned with yourlife goals and corresponding inflation rat

5.Risk Exposure and Management: ChestX-ray

Next, do a “chest X-ray”. Your liquid assets together with life and critical illness insurance benefits should cater for at least a minimum of three years of your family living expenses in case of unfortunate events. Ensure that you have sufficient hospitalisation coverage to protect yourself and family against hefty medical expenses.

6.Estate Planning: Liverfunction

Last but not least, check your “liver function”. Upon death event, all assets are “frozen” until the grant of probate is obtained, which may take months.

BY LIM LEE CHIN AND SUCCESS CONCEPTS LIFE PLANNERS VICE PRESIDENT

Effective estate planning ensures that your dependants have sufficient liquidity to fund for their living expenses until your assets are transferred to them Your financial planner should be able to conduct a comprehensive financial health screening for you. Do this as soon as you can. Health is wealth. The writer can be contacted at info@successconcepts.biz