How to Assess Your Financial Health

- by Erin Redfern

The Complete Guide to Financial Crisis RecoveryChapter 1

Regaining your financial health can seem like an impossible goal before you begin. Nevertheless, “a journey of a thousand miles begins with a single step.” – Laozi. Follow Cashfloat’s step-by-step instructions to start your journey today!

How to assess your financial health- Chapter 1 financial crisis recovery guide - Cashfloat

Your Financial Health Check-up

Take a deep breath, and let’s dive right into it. The first step to planning your financial recovery is to figure out where you’re starting. Everyone would like to be a millionaire, but it’s going to be a different journey if you’ve already got £999,999 versus £9,000. Assessing your current financial health will help you decide your financial goals and your path to get to them.

DOWNLOAD FINANCIAL CHECK-UP WORKSHEET

Current Assets

Begin by adding up your money and assets, starting with the most obvious places:

  • First, how much money do you currently have in your bank accounts, savings and investment accounts? This one is fairly simple – just check your online account to see the balances.
  • Now, what are your remaining assets? Do you own any property, jewellery, antiques, or valuable collectors’ items? You might need the help of an appraiser to determine the value of your assets, but don’t hire one just yet. For now, just write down the asset and its approximate value. Later on, you may choose to sell a valuable or refinance a mortgage as part of your recovery plan. That would be the right time to contact an appraiser.

Great job! Now you have an accurate picture of how much money you currently have to start tackling debts. On to the next step:

A journey of a thousand miles begins with  a single step. ~ Chinese Proverb A journey of a thousand miles begins with  a single step. ~ Chinese Proverb

Regular Income

  • How much income do you bring in each month? Record your salary, plus any regular bonuses or overtime. If applicable, write down your partner’s salary along with regular bonuses and overtime. Do you work a side job? Record that income. Are you receiving government benefits, pension, or other regular income each month? Record those as well.

This will give you a good idea of how much money you can expect to bring in each month, an important factor which will help you build your monthly budget.

Negative Factors & Spending Habits

Next, lay out your financial shortfall.

  • How much money do you owe? To whom do you owe money? Write down all your debts here, including credit card bills, overdue rent, bank overdraft repayments, loan repayments and other past-due bills. Add up the numbers so you can see the total amount you owe.
  • Next, how much money do you spend each month? What do you spend it on? Break down your monthly budget into categories with approximate numbers. Better yet, use last month’s bank statement to see exactly how you spent your money.
You're already one step closer to financial freedom!- Cashfloat

Other Financial Information

  • We know that Covid-19 happened a few years ago now but many people may still be feeling the effects. How did the coronavirus affect your finances? Did you lost your job and need to look for a new one? Did you borrow any payday loans? Did you take a pay cut? Were you placed on furlough? Are you living on unemployment benefits? Write down your situation and translate it into numbers. For example, you were making £30,000 per year, but you took a 20% pay cut, and now your annual salary is only £24,000. That means your monthly income went down from £2,500 to £2,000.
  • How has this cost of living crisis affected you? Do you find yourself paying more on your grocery shopping? Are you managing to pay your monthly bills on time?
  • Finally, what is your credit score? If you have a partner, what is their credit score? This is important, as a good credit score can help you access the best credit options. This may be one of the ways you choose to pay off debt.

Excellent work! You now have a clear picture of where you stand financially. Now you have the strong foundation you need to build solid goals and a workable plan to economic recovery.

Click here to read about Cashfloat’s analysis of the cost of living crisis - Cashfloat
Sources
  1. Financialmentor.com (n.d.), “Don’t Let An Economic Downturn Ruin Your Wealth Growth,” – Retrieved 28/04/2020
  2. Financialmentor.com (n.d.), “6 Steps To Recover From Financial Disaster,” – Retrieved 28/04/2020
  3. Wikipedia (last edited 24/04/2020), “A Journey of a Thousand Miles Begins with a Single Step” – Retrieved 13/05/2020




Share
Do you know someone who could benefit from this article?
About The Author
Erin Redfern
Erin, a native Londoner, combines her love for the city with her passion for writing. With a first-class degree in Mathematics, Elizabeth chose to pursue a career aligned with her real passion—writing.
We work hard to provide useful and practical information on our website. Read our editorial policy.
Need money today? Apply now for our fast payday loans.
Blog disclaimer

We do all we can to bring you interesting, practical and valuable information. However, please understand the following:

Information and data on this blog are for information purposes only. While we work hard to ensure it is accurate, we cannot accept responsibility for the accuracy, completeness, suitability or validity of any information provided on the blog. We will not be liable for any errors, omissions, losses, injuries or damages arising from its display or use. All information is provided with no warranties and confers no rights.

If you feel that any of the information published on our blog is not accurate, please notify us via email at compliance@cashfloat.co.uk

Cashfloat is a trading style of Western Circle Limited - Company Registration Number: 7581337. We are fully authorised and regulated by The Financial Conduct Authority. FCA full permission license: 714479. ICO Registration Number: Z3305234


* Cashfloat terms and conditions apply. Applicants must be 18 or over. All loans are subject to affordability, applicant verification and traditional credit checks via various national databases by Cashfloat responsible lending policy. In most cases, loan decisions may take up to 30 minutes during office working hours. If your bank does not support Faster Payments, funds will be sent to your account the same day as approval so long as you’re approved by 16:30.


*Money will be funded to your bank within 1 hour of approval - Mon-Fri during working hours.


Representative example: Borrow £700 for 6 months. 1st monthly repayment of £168.45, 4 monthly repayments of £224.60, last monthly repayment of £112.20. Total repayment £1,179.05. Interest rate p.a. (fixed) 185.39%. Representative APR 611.74% Our APR includes all applicable fees. Daily interest is capped at 0.798%.


Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk