The highlights
- Financial check-ins can help you track your progress on your money goals, like investing, paying down debt, saving for unexpected costs, or becoming a homeowner.
- Creating a checklist with specific action items can help you stay focused and reach your financial goals. Plus, it may make you feel good when you mark items on your checklist as “done.”
- Calculating your net worth can be part of your check-in to measure progress toward your financial goals—and to build confidence along the way.
A financial check-in or personal finance review can be thought of like a wellness visit to your doctor. It’s a time to assess your current health, talk about what’s changed recently, and think about your long-term health and financial goals.
Regular financial check-ins help you take a broader view of your financial health and the progress you’re making in saving, paying down debt, or other financial goals. It’s best to do them on a regular basis—you decide how often—and whenever you experience big life changes like starting a new job or getting married.
A financial advisor can be helpful with a financial check-in. But if you don’t have one yet, you can still assess your progress on your own. We’ve got some tips that can help you get started or build upon what you’re already doing.
Ask yourself these 5 questions during a financial check-in.
1. Do I have enough saved for emergencies?
Having a healthy emergency savings fund can help you feel confident and prepared for the unexpected. If you’re just getting started, consider setting an initial goal of saving $1,000. You can set up an automatic transfer from your checking account to your savings account based on your pay schedule so that you’re adding to your emergency savings every time you receive a paycheck. Once you’ve reached your $1,000 goal, continue growing your emergency fund so it can cover three to six months’ worth of living expenses.
2. Am I living within my means?
Spending less money than you make is a key principle of financial wellness, and a budget can help you accomplish this. If you don’t already have one, creating a budget can be part of your financial check-in. Several apps exist to help you build a budget, and Truist offers a budget spreadsheet to help you get started. If you already have a budget, use your financial check-in to review and adjust it as needed.
Check your budget to see how you stack up with common financial rules of thumb. For example, are you spending more than 30% of your income on housing? Being out of balance on one part of your budget can stop you from achieving other financial goals. Remind yourself that living within your means can help you spend more on things that bring you joy—and less on things that don’t.
3. Do I have a plan to handle debt?
Your financial check-in is also a great time to ensure you have a plan for paying off any outstanding debts, including student loans. One approach, called the debt snowball, is to start with any debts under $1,000. Eliminating smaller debts allows you to build momentum and then shift your focus to paying down higher balances. Another method is to pay off debts with the highest interest rate first. Known as the avalanche method, it moves slowly at first, but as you reduce the dollars dedicated to interest on your loans, you increase your pace of payoff as you move down the list of debts.
4. Am I properly insured?
Having proper insurance can help provide financial protection in case of events like accidents, injuries, illnesses, or natural disasters. Health, home or renters, and auto are the most common types of insurance you may need. Whether you need additional insurance, such as life or disability, depends on your particular situation. Consider meeting with a qualified insurance agent to review your coverage and make sure you’re not underinsured or over-insured and paying for more than you need.
5. Am I investing for my future?
If you have dreams of retiring one day, investing could be a crucial part of getting you there. If your employer offers a 401(k) or other type of workplace-sponsored retirement savings plan, check to see if there’s a certain amount you need to contribute to have your employer match all or part of it. Other investing options include an individual retirement account (IRA) or a health savings account (HSA), which can be used for healthcare expenses but also allows you the option to invest some of the savings. Using our retirement savings calculator can help you figure out how much to save for the long term and how compounding leverages the power of time to build wealth.
Create a financial checklist.
Your financial checklist is basically a to-do list for your financial goals. Your checklist can cover more broad goals like living within your means or more specific ones like creating a will.
For example, let’s say you have a goal to retire early. Specific tasks on your checklist could include:
- Schedule a meeting with a financial advisor.
- Increase 401(k) contributions to a specific amount.
- Review investments quarterly.
Let’s look at another example: buying a home. Before you call a real estate agent and start visiting open houses, have a financial check-in and create a checklist with action items such as:
- Raise my credit score to qualify for the best possible interest rate on a mortgage loan.
- Save enough for a 10% (or more) down payment on a home in a neighborhood I like.
- Pay off my consumer debt so I can put more money toward mortgage payments and home maintenance.
At least once a year, refer to your checklist. Are you making progress toward your money goals? Where do you need to change your focus to put yourself in better shape? Celebrate any wins or progress you’ve made—and use your momentum to help you come up with new next steps.
Calculate your net worth.
Your net worth is all your assets minus all your liabilities—in other words, everything you own minus everything you owe. Knowing this one number can help you make progress on all of your financial goals simultaneously.
“It’s the check-in of all check-ins,” says Truist Head of Financial Wellness Brian Ford. “Calculating this one figure can do so much for you. A lot of people want to set goals around saving more or paying off debt or investing. If you commit to growing your net worth, you can do all of that.”
To calculate your net worth:
- Add up the value of all your assets, including the money in your checking and savings accounts and any investment accounts, plus the value of your car, your house or condominium (if you are the owner), and any other assets.
- Subtract the total of your debts, such as credit card debt, education loans, car loans, or other debts.
Assets - Liabilities = Net Worth
Assets
- Checking accounts
- Savings accounts
- Investments
- Retirement savings
- Home equity
- Cars
Liabilities
- Credit card debt
- Auto loans
- Mortgage
- Student loans
- Taxes owed
- Other debt
It isn't unusual to have a negative net worth if you're early in your financial journey or carrying significant debt. Lots of people start there—so it's nothing to be ashamed of. Consistent financial check-ins and adjustments as your life evolves can help you grow your net worth and financial confidence.
On the Money and Mindset With Bright and Brian podcast, Ford outlines how calculating your net worth can be an important part of a financial check-in.
“If your net worth is going up steadily, you know that you’re doing a pretty good job financially,” he says. “And there are two ways you can grow your net worth. You can either save and invest more or you can pay off debt—or do both.”
Ford says that it’s important not to try to take stock of everything too often. “You probably shouldn’t do it more than quarterly, no matter how advanced you are,” he says. “Some people can look at the market too much and overanalyze their finances. You can develop a good system that should be largely automated and able to keep you on the right track without you having to do constant check-ins.”
Build confidence and optimism through financial check-ins.
Self-efficacy is what you think about your ability to adapt and overcome challenges in the future. And one positive, lesser-known side effect of a financial check-in is that it can help you build self-efficacy.
When you reach your short-term financial goals, you’re setting yourself up to achieve even bigger things in the future. “You’re accomplishing a task, you’re solving a problem, and you’re growing your ability,” says Bright Dickson, a positive psychology expert with Truist and co-host of the Money and Mindset with Bright and Brian podcast. “That’s self-efficacy. It builds confidence. It builds optimism, and it’s connected to positive emotion.”
In other words, it may feel really good to do a financial check-in, even if you’re working through challenges. Check-ins can help you learn, grow, and move forward—and with every check-in, you can help yourself become more confident in your financial future.
Next steps
- Get that check-in going! Use the five questions at the beginning of this article to help kick things off.
- Organize your files, automate your bill payments, close old accounts, and look for other ways to declutter your finances as part of your check-in.
- Craft a personal purpose statement, which can help you figure out what you value most in life and how your finances can support those values.