40% of Americans admits to having $400 or less in their savings accounts.

Without extra money in savings, just one accident or unexpected expense can be a financial disaster.

Financial security starts with getting organized and understanding your financial health.

The average American's savings account

Key Attributes of Financial Health:

  • Having an organized view of your assets & accounts

  • Understanding your liabilities & debts

  • Staying on top of your Income (money in) & expenses (money out)

Gather Your Financial Information

Photo by Green Chameleon on UnsplashPhoto by Green Chameleon on Unsplash
  • Identify all of your accounts. Checking, Savings, Investments, Credit Cards, etc.

  • Verify all income is documented and received in the correct account(s).

  • Create a list of all of your expenses.

  • Consider potential taxes. Are any of your expenses eligible for a tax credit? Should you be saving any income to pay future taxes?

Schedule one hour each month to review this information.

Analyze Your Financial Information

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  • Calculate how much cushion you have left over in accounts after all monthly expenses. Do you have at least 3-6 months worth of necessary expenses set aside for emergencies?

  • The "50/30/20" budget guidance suggests your income should be spent 50% on needs, 30% on wants, & 20% to payoff off debts/adding to savings. What is the current breakdown of your income today?

Do You Need To Take Action?

Your answers to these questions may uncover some opportunities to improve your financial health.

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If the answers leave you feeling uneasy, consider what non-essential expenses you can cut.

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If the answers leave you feeling good, congrats! Do this financial health check monthly to stay on track.

Summary

Photo by Kelly Sikkema on UnsplashPhoto by Kelly Sikkema on Unsplash

Grab your calendar right now!

Book in some time to do your first financial health check.

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This Byte has been authored by

OF

Omer Fancy

Using technology to drive value for investors.

DH

Derek Hynes

Senior Associate at The Carlyle Group

RL

Ryan Lavin

Vice President, The Carlyle Group

BH

Brett W. Hinton

Managing Director, Global Credit

DL

David Lynch

David Lynch Principal/The Carlyle Group

LM

LeeAnn Martin

HR Assistant and Volunteer Coordinator