Skip to content

Time for a checkup

Please open your wallet and say "aaaaah." It's time for your annual personal financial self-examination

Take three minutes to score yourself on each of the following Planning Ps, provided by The Investment Reporter: 0=not, 1=a bit, 2=on my way, 3=all good.

- Plan. 0 1 2 3 Decide where you want to be financially, by when and how you will save/invest to get there. It's a trip: you need a destination, map and transportation.

- Priorities. 0 1 2 3 Rank expenses (including debt reduction and saving) from most to least important. Trim from the bottom until the total equals after-tax income.

- Preparation. 0 1 2 3 Set up a simple or detailed structure, whatever works for you, to keep track of your finances - money in and out, regular meetings with family member(s), advisors, or just yourself.

- Portfolio. 0 1 2 3 Decide on the correct investment mix of capital gains, income and safety - ideally before you commit the money or to reorganize what you already have.

- Prudence. 0 1 2 3 Salespeople (and you) tend to look at the bright side of investment opportunities.

While it's fine to hope for the best, you must always be prepared for the worst. Can you cope, and what will you do, if an investment goes bad?

- Patience. 0 1 2 3 Be prepared to hold investments for a long term - typically five to 10 years. If you make money in the short term, that's a bonus.

- Perspective. 0 1 2 3 Look on each investment as part of the financial whole.

Your plan should determine your choices, not the other way around.

How did you score? Congratulate yourself on the 2s and 3s; mark the 0s and 1s for remedial treatment.

Clip this column and repeat the checkup every six months. Even if you scored well, your situation might change. Make sure all these Planning Ps remain healthy.

If you tend to procrastinate, enlist the help of a financial advisor to make sure the 0s and 1s turn into 2s and 3s. Make an appointment at your financial institution with a planner - somebody who is knowledgeable and relatively unbiased.

Mike Grenby is a columnist and independent personal financial advisor; he'll answer questions in this column as space allows but cannot reply personally. Email