Money Checklist: 10 things to check off to stay financially healthy

You need to know exactly how much income you or your household is bringing in each month. This is typically 80% of your salary, and to be even more prudent, you may also deduct your tax commitments for the year.

You also need to know where your money is going each month, whether it is being used towards essential expenses such as your home loan, transportation, groceries, mobile plans, insurance premiums, utilities or more discretionary spending on eating out, cab rides, shopping, gym memberships or other forms of entertainment.

As you build a monthly budget that you are comfortable with, you should include other important areas of your finances, such as building an emergency fund to provide a financial buffer during unexpected situations that may arise in life or give you the financial flexibility to adopt a lifestyle you prefer in the future.

Once you have an adequate safety net in place, you should look more closely at all the debt that you have. Work towards paying off all your high-interest debt. These are usually those that incur an annual interest of more than 7% to 8%, which is higher than what you can realistically earn by investing.

Typically, your personal loans, interest or fee-bearing instalment plans for household appliances and credit card debt are the ones you need to target. You don’t have to be too worried over lower interest debt such as your home loan or car loan, as you can consider investing to earn a better return.

Everyone will have some form of big ticket expenses that they have to plan for. For those who are younger, a wedding, home purchase and home renovation could be on the agenda, while those slightly older may need to fork out for their children’s university fees. If you’re at the tail-end of your career, retirement is your upcoming expense as you may no longer be drawing a salary.

Even if you don’t have any of these expenses coming up in the immediate term, you will still have expenses such as a holiday or car purchase to plan for carefully.

As you achieve new milestones in your life or move into a new stage of life, your insurance and investment needs may change drastically. This is why it can be important to conduct a yearly review of your goals and needs with a trusted financial advisor. Even if you know what adjustments you may need to make, this review can also be helpful to ensure you don’t have any blindsides.