5 Reasons Why Financial Check Ups Are Important

  Have you ever heard of a personal financial check-up? Or maybe you've ever done it? If so, be lucky because you must be the type of person who cares deeply about your financial condition.

An easy definition of a financial check up is an overall check of your financial system. This way you can know if there is a problem so that it can be immediately anticipated.

Financial check ups can be done periodically, either every month, every six months or every year.

Commonly checked are some of these things:

1. Total assets
2. Total debt or liability,
3. Total income and expenses,
4. Total savings.
   

Usually the results of the calculation will be assessed based on three important ratios:

1. Saving Ratio is the savings you have, including investments, deposits and others.
2. Liquidity Ratio is the information of funds owned if you are no longer working or retired.
3. Debt Service Ratio is the income that must be spent to pay debts.
   

It's a good reason why financial check-ups are important:

1. Can Nourish Your Personal Finances

As mentioned above, financial check ups can nourish your personal finances. You can know the financial condition including problems that arise or that will arise. Regular checking will avoid you from bankruptcy and possibly in debt for things you should be able to avoid.

Imagine if it wasn't done. How much money comes out without realizing it.

2. Know Where Money Is Flowing

Often you complain, the money can just run out. Even though just yesterday payday or received a bonus. Or, it's still mid-month, the money is up. In fact, what was my money used? It's over. By doing a Financial check up, it will not happen, because he will provide enough information about the flow of funds (cash flow) that occurs, so you do not need to be dizzy.

In addition, by using financial check ups, you can cut out unimportant posts that can be saved.

3. Be More Careful Using Money

You will be more careful in using money. For example, when doing financial check ups, you will find that your budget to have a coffee with friends is very large, even though if stored, you can buy the latest android output. Or, money that is often used to watch in the cinema, it can be saved to buy new shoes. Well then you become more aware of yourself and limit that one activity.

4. Support future plans

Financial check-ups are important because they can show if you can realize some important future plans. For example, if you plan to get married and look for a loan, you can know for sure how to pay the loan.

Is that all? Not. In family life, financial check ups will also help you ensure that your dream of buying your own home will be achieved. In this case he will help us to check which sectors whose money can be diverted to release installments of home purchases.

5. Can Be a Future Financial Prediction

The name of sustenance is governed by the Almighty. Sometimes you get a job with a fairly good salary. But you could suddenly be jobless because of Indonesia's unstable economic condition. Well, this financial check up can help you predict how long you can survive post-idle.

In addition to the prediction, the results of financial check-ups can also show whether you should look for a new job if it turns out that your income is smaller than spending.

Many Uses but Neglected

Although important, for some people financial check ups are considered unpleasant activities and tend to be boring. Because you have to carefully store all receipts and expense bonds and record them one by one.

It's time to start doing financial check-ups for your financial health. Complicated a little does not matter, the important thing is you can know your financial condition without having to go bankrupt first.