(HawaiiNewsNow) -We're a couple of months away from the tax deadline - a common time of the year where people take a look at their finances and figure out what needs to be changed or keep the same. And a good way to do this is to get a financial checkup. Here to talk more about this is Lauren Fujii from Bank of Hawaii.
What is a financial checkup and why is it so important?
People probably go to their doctor for an annual physical checkup: check blood pressure, talk about concerns, but do they get an annual financial checkup?
A lot can change/happen in a year: markets change, beneficiaries change, and basically life changes so just as doctor would look at good vs. bad cholesterol, would look at good vs. bad debt.
So what would be one of the first things to look at in this financial checkup?
• Net Worth: probably best gauge for measuring financial health
• Simple equation to figure out net worth: subtract liabilities from assets
• Assets should outweigh liabilities
• Important to know that even if assets are not growing, if you pay down liabilities/debt, your assets will grow
What about life events? How do they affect my financial checkup?
• Look at major changes in your life over past year
• What has changed in my life that may change things in my financial plan?
• Depending on what has changed, may need more or less insurance or may need to update estate plan
Anything other areas people should look at during a financial checkup?
• Ask yourself: Has your outlook or goals changed? Are you happy?
• Important to look at what you can do to be happier and better off a year from now
• Whether it's to save more money, pay off debt, change careers - important questions to ask
• It's a mix of evaluating life and money
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