Are your current finances compatible with life?
This is the introductory post in my Money Vital Signs series- 5 short posts to understand your financial status quo.
In the field of critical care medicine, there are five vital signs. They are:
- heart rate
- blood pressure
- respiratory rate
- oxygen saturation
- temperature
As an Anaesthetist, monitoring a patient’s vital signs is central to my job. I check them repeatedly before, during and after any operation.
With each check, there are three questions I need to ask myself:
1. Right now, are these numbers safe?
2. How does this compare to prior readings?
3. Is there something I need to do right now?
Each vital sign has a safe range that is compatible with life.
Did you know that your money also has vital signs that can indicate your financial health?
The 5 Money Vital Signs:
1. Cash Flow- Income & Expenses
2. Net Worth – Assets & Liabilities
4. Insurance- General, Personal & Professional
5. Estate Planning- Wills, Power of Attorney & Advanced Care Directives
Each of them is crucially important.
Knowing our Money Vitals allows us to do three things:
- Snapshot the present- identify safety
- Track the past- plot trends and trajectory
- Target the future- take action to ensure we meet our goals
I will dedicate a post to each vital sign. I’ll begin with a short explanation of each followed by an action step called Record Your Vitals. I have created a spreadsheet with a tab for each vital sign to make life easier for you. You can download the Money Vital Signs spreadsheet here.
It’s really important that you take the time to read, understand and record at all five elements, even if you don’t like what the reflection will show.
The ostrich strategy of burying your head in the sand is unlikely to end happily.
The aim is that each post will give you a better understanding of your overall financial health. With repeated measurement, you’ll be able to use the data to optimise your financial future- my focus of this blog.
You’ll never plough a field by turning it over in your mind.
Irish Proverb.
Are you ready to get started? Click here to start Money Vital Sign #1- Your Cash Flow
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