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5 Questions to Ask Yourself For a Better Financial Future

Oct 19, 2020, 10:40 AM
Young woman thinking with an open book

Your finances are much more than your monthly bills and account statements. They reflect your day-to-day needs, long-term goals, and overall relationship with your money, so it's important to stay on top of your finances. Here are 5 financial questions to ask yourself for a better financial future:

How Are My Savings?

Your financial health check begins with your goals. Before you look at the contents of your savings account, think about what you want in life. Whether you’re saving for a new car, a dream vacation, or higher education, picture those goals. If you’re regularly contributing money to your savings, you’re off to a great start. If you aren’t, figure out why.

How am I doing with my emergency fund?

How long would you be able to pay for essentials if you unexpectedly lost your job? This could be due to an unexpected life change, being laid off, or something no one was anticipating (a.k.a. the pandemic, unforeseen medical expenses, etc.) However, it may happen so you’ll want to prepare an emergency fund in advance. Reasonable recommendations usually say to have enough money set aside to pay for 3-6 months of expenses which will hopefully last you until you find a new source of income or cover the cost of any unexpected large expenses.

Can I find ways to cut wasteful spending?

If you want a healthy financial future, track and look for wasteful spending. If you never read the magazines you subscribe to, cancel them. Stop automatic payments you’re still making for things you don’t use, like streaming services or gym memberships. Determine if you have any bad spending habits, like getting takeout too much or buying too many clothes. Set appropriate budget limits for these expenses. Money saved here could be used toward an emergency fund, retirement savings or other financial goals you have.

Am I Paying Down Debt?

Are you struggling to keep up with loan payments or only making the minimum payment on high interest credit cards? Now could be the time to create and stick to a budget that makes paying off debt a higher priority. If you’re struggling with debt, consider seeking some guidance so you don’t have to tackle this challenge alone.

If I had to retire earlier than planned, what would I do?

As we all know, things don’t always go according to plan. Sometimes, people are forced into early retirement due to personal health issues or a variety of other reasons. To avoid a scenario where a forced early retirement hurts you, it's important that you make an effort to start socking money away for your senior years at an early age. You may be in for a financial shock if early retirement is forced upon you and you’ve prolonged saving for retirement until your 40’s or 50’s. 

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