See more from Finance

Advertiser Disclosure

Personal Finance Checklist – A Guide to Financial Health

Spread the love

The personal finance checklist shows you the vital steps to building a steady foundation for wealth.

man with ipad


Are you financially healthy?

This personal finance checklist walks you through the basics of building a strong foundation for future wealth. 

Find out if you’re on the right track to build and retain wealth in your future by checking the five steps below.

Bookmark this article, so you can return to check things off the list as you build a healthy financial future for you and your family!

Step #1 – Save Strategically

In this section, we show you how to save strategically by understanding how much money you should put in a savings account, and how to find the best bank for your money.

Saving six months worth of living expenses is critical to your family’s safety. As we’ve seen with the Covid-19 pandemic, life can be unpredictable.


No matter how secure your job, how good your health insurance, or how stable your finances are, crises can still arise.

In fact, some say that the only thing constant about life — is change.

That’s why you need to set aside an emergency fund, so you can continue to feed and care for yourself and your loved ones when the unexpected happens. 

Whether it’s a job loss, a broken-down car, or a global pandemic, you need an emergency fund to help you survive life’s little (and big) surprises.

We recommend putting all of your extra income toward your savings account until you have $2000 saved. Then, you can allocate a portion of your monthly income toward your emergency savings (six months’ of living expenses) until your full savings account is built.

This means that, until you have a short-term $2000 emergency savings, you’ll skip the little luxuries like going out to eat, purchasing coffee from Starbucks, or going on that vacation you’ve been dreaming about.

Giving up the extras until your short-term ($2000) savings is funded is essential for your survival. If your car breaks down or your phone or computer stops working, it could prevent you from earning an income. 

These small emergencies, like car maintenance or phone replacements, can hurt you the most because, if you’re not prepared, these “little” emergencies can set you on a downward financial spiral that threatens your home and your health.

Six months’ of living expenses is a lot of money to save, so you want to make sure you’re saving your money in a bank that offers:

  • FDIC insurance
  • The highest possible interest rates
  • Fee-free savings

Finding a bank that provides you with all three points gives you the best chance of not losing money.

For example, did you know that Paypal is not FDIC insured? In fact, Paypal isn’t even considered a “bank.” So, Paypal is not where you want to save your money, because if Paypal falls apart, your money’s not insured.

Also, did you know that brick and mortar banks pay a lot less interest on your money than online banks?

How banks work

When you put money in the bank, the bank makes a lot of money from your money. It turns around and lends your money to other people, often earning between 4 – 25% interest for themselves. 

Yet, banks only pay you about .01% interest on your savings account, even though inflation.

For example, in 2018 – 2019, banks paid an average 0.9% interest on savings accounts, even though the inflation rate was 1.76%. That means the money in your savings account would have lost 0.76% that year.

losing to inflation calculator

Worse, when the Federal Reserve cuts interest rates on loans, as with the coronavirus, they also cut interest rates on your savings account. 

That’s why you need to save your money strategically.

If you’re just starting your savings fund, we recommend opening your account with an online bank. 

Or, if you’re already building your emergency savings, research online banks to find out if it’s worth moving your savings to an online bank.emergencycashfund

Online banks are disrupting the industry with higher interest rates than brick-and-mortar institutions can offer because they operate with dramatically-lower overhead.

This is why we recommend using online banks, specifically CIT Bank, to store your emergency savings fund.

By moving your money to CIT Bank, you can get a much better interest rate without paying any monthly maintenance fees.

Open an account with higher interest rates and no monthly fees at CIT Bank

Saving money in a bank will almost always cost you money (because of inflation), but finding a bank that pays higher interest without charging you any bank fees can seriously cut your costs.

For the highest rates in banking, we recommend CIT Bank. It only takes a few moments to open your new bank account and start saving for the best thing money can buy — peace of mind.

Step #2 – Invest Wisely 

Find out how and where to invest so you can start building wealth.

Since there are only 24 hours in a day, the amount of time you spend making money is limited if you’re only getting paid during working hours.

[bctt tweet=”Investing is a way to build wealth without having to spend your time earning it.”]

When you invest, your money can earn money. By reinvesting the profits from your investments, you can begin to build wealth.

With investments, you’re not limited to earning whatever salary or hourly pay your company thinks you’re worth. Instead, your investments work for you.

Stock market and real estate investing are two of the best places to invest your money.

Stock Market Investing

Stock marketing investing offers a few advantages:

    • Easy start: Stock market investing is an easy way to begin investing.
    • Liquidity: You can cash out your stocks at any time and receive immediate payment.
    • Hands-off investing: You can invest in ways that don’t require your time or physical presence.
    • Some tax breaks: Your stock market investments do offer some limited tax breaks.

The disadvantage of stock market investing is that you have no control over your investments. If your stocks take a plunge, no amount of hard work or research can fix it. You can only choose your investments wisely and hope they do well.

If you enjoy buying and selling stocks, though, you can become more involved in the outcome of your investment by actively buying and selling stocks. 

Companies such as Webull provide trading privileges and software/apps that allow you to invest in thousands of companies. Using trading tools and analytics, you can build your own financial portfolio.

webull trading softwareExample from Webull financial company

If you’re interested in doing your own trading, we recommend opening a brokerage account with Webull because they charge no commission and require no deposit minimums.

Start trading now with Webull

Passive Investing

If you’d rather invest your money on “autopilot,” — that’s called passive investing.

Passive investing gives you a handful of advantages over hands-on investing such as stock trading. 

In addition to freeing up your time for more investing (or other things), passive investing prevents you from allowing your emotions to take control of your trading.

To get started with passive investing, we recommend checking out M1 Finance.

M1 can invest your money automatically, so you can get busy doing other things. 

Plus, M1 lets you purchase fractional shares. If you can’t afford to buy a stock that costs $2000, M1 lets you buy a piece of one stock.

Get started with passive investing today by visiting M1 Finance

Real Estate Investing

Real estate is another excellent way to get your money making more money for you.

For example, if you purchase homes in prime locations, you can rent them out to tenants who pay you monthly rent.

Real estate takes a bit of hands-on work such as purchasing properties, ordering inspections, and hiring and supervising contractors for upgrades or maintenance. 

Plus, you have to screen tenants and manage any problems and maintenance issues along the way.

Fortunately, you can hire a property manager to take over a lot of that work for you, so you can do other things like find new properties or investments.

The best part about owning real estate is that you get a sizable, steady income stream flowing in every month.

And the tax breaks. Real estate investing gives you some of the best tax breaks our entire tax code has to offer. 

For example, if you invest $10,000 and turn it into a million dollars, you can end up paying ZERO taxes right away. Instead, you turn around and reinvest your entire earnings immediately – making your money’s money earn you money!

The most challenging part of investing in real estate is getting started. You need to access quite a bit of capital to get started, but fortunately, there are companies that can help you with that.

If you want to get started in real estate investing, but don’t have a significant amount of capital yet, we recommend you check out our friends at Fundrise

Fundrise is the first company to successfully crowdfund real estate investments. You can build a portfolio of real estate investments (with a typical return of 8.7 – 12.4%) with very little money. 

We recommend Fundrise for people who want to start investing and gain exposure to the real estate market without having to come up with a large amount of capital.

Start investing in real estate for as little as $500 with Fundrise

No matter what happens in the world, people will always need a place to live, which means real estate will always be in demand. This makes real estate an investment that’s worthy of the time it takes to learn your way around and begin investing.

Step #3 – Spend Responsibly

Can you afford it? We’ll tell you how to decide what you can afford, and show you how credit cards can help – not hurt – your finances.

[bctt tweet=”No matter how much money you earn or how much wealth you build, you can still overspend and end up broke if you’re not careful with your money.”]

For example, lottery winners are more likely than most Americans to declare bankruptcy, and they usually do it within 3 – 5 years of winning.

Alex Toth, a 1990 lottery winner of $13 million, opted for a 20-year payment plan that paid him over $650,000 annually. He managed to go broke anyway, by living an overindulgent lifestyle. By 2008, at the age of 60, Toth died penniless.

Single mom Lisa Arcand won $1 million in April 2004. Lisa bought a restaurant and burned through the rest of her winnings by purchasing things she couldn’t afford – like a house, furniture, and vacations. Within four years of winning the lottery, Lisa was broke and back in debt.

Eagle Trib Lisa Arcand broke lottery winner Source: Eagle Tribune

Think it’s the sudden windfall that makes people go broke? Probably not.

Evidence shows that people who make it into the top 1% of earners often don’t stay there long.

This is why learning how to spend money now, before you’re wealthy, is critical to your long-term success. 

By learning good money management skills now, you can significantly increase your chances of building – and retaining – wealth in the future.

Smart spending is simple! Don’t buy what you can’t afford.

  • If you have to use a credit card to purchase something, you can’t afford it. 
  • If you have to take out a loan to buy something, you can’t afford it.
  • If you need financing to make a purchase, you can’t afford it.

    Don’t get trapped into thinking that your credit card limit or bank line of credit is part of your spending, or even emergency, budget!

    Financing comes with outrageous interest fees that are designed to keep you broke – and dependent on the banks that profit from them.

Follow “The rule of 5.” If you can’t buy five of them, you can’t afford it.

Consider refinancing if you’re carrying a lot of high-interest debt.

Interest rates are lower than they’ve been in years, and you can use that to your advantage if you’re carrying debt.

By only refinancing for what you owe, and then making higher-than the required payments, you can burn through your debt quicker and pay it off for less.

If you have student loans, we recommend you consider refinancing with Credible

If you have a mortgage, we recommend you shopping around to see how much money you could save by refinancing your mortgage.

Credible is a free and trusted service that can provide you with a list of up to ten lenders, so you can compare rates. It only takes a few moments to get a list of vetted lenders, and it doesn’t hurt your credit score to apply.

  1. See how much money you can save on your student loans with a free quote
  2. See how much money you can save by refinancing your mortgage
  3. See how much money you can save on your new mortgage in minutes

Credit cards don’t destroy people. 

Poor spending habits destroy people. Taking out credit cards before you’ve developed good spending habits isn’t a good idea.

If you have good financial habits, though, credit cards can off you three advantages:

If you’ve developed good spending habits, and you’re able to live within your means, then consider using a credit card for your purchases instead of a debit card or cash. 

Here are 3 simple steps to using credit cards responsibly:

  1. Treat your credit card like a debit card and only make purchases you would normally make.
  2. Pay off your credit card entirely at the end of each month.
  3. Use a credit card that offers you rewards, and make all your purchases with it – instead of using cash or a debit card.

Wondering what credit cards give you the best perks?  Check out the following Minority Mindset articles to find out!

  1. The best cashback credit cards
  2. The best travel credit cards
  3. The best business credit cards

Many people use their credit cards the wrong way, which can lead to a mountain of debt and years of struggle. 

But, if you know how to spend money wisely and develop good financial habits, credit cards can be a way for you to earn money and rewards without having to work for them.

Step #4 – Earn Ambitiously

In this section, we share some quick tips and ideas on how you can earn money to fuel your savings and investment strategies.

Need to pull yourself out of debt or make a few extra dollars to pump up your savings account? 

Or, perhaps it’s been waaaay too long since you’ve taken a vacation?

When you need extra money, there are hundreds of ways to do it that don’t involve scamming your friends, jumping into the latest pyramid scheme, or doing anything you might regret later.

Some side hustles you can pick up to earn extra money:

  • Start an online business
  • Work as a freelancer
  • Hack your house

It’s essential to live below your means, but you also need to know how to expand your means if you’re not making enough money to get ahead.

Here are some red flags that are telling you to boost your income:

  • Can’t put a portion of your income toward investing?
  • Still working toward building a savings of six months’ living expenses?
  • Can’t get your debt paid off?

Minority Mindset thinkers don’t sit around waiting for life to get better. Instead, they MIH (make it happen)!

Fuel your income and wealth-building by earning more money — instead of waiting around, hoping for a raise or desperately grabbing any chance for overtime hours.

Step #5 – Protect Meticulously

Don’t leave your hard-earned money unprotected! Find out how to keep your assets safe and protected.

You work hard, spend responsibly, invest wisely, and save strategically. 

Now, how will you protect everything you’ve worked for? There are three basic ways to protect your assets:

  1. Get a will. A will is how you tell the world how you want your assets divided after you die. If you don’t have a will, you’re agreeing to let the government decide. Get a will!
  2. Retain an attorney to protect your wealth. Paying an attorney to review your business and financial transactions can save you a fortune in the long run. Investing in a good attorney, and allowing them to review all your transactions, is essential to protecting your assets.
  3. Get life insurance. Life insurance is a critical risk management strategy that protects your most valuable assets — the people you care about. We recommend purchasing term life insurance for an amount equal to 10X your salary.

    For the best prices on life insurance, we recommend visiting Policygenius to compare quotes from several insurance companies.

While you may not need an attorney right away, and you may mistakenly avoid getting a will drafted up, you must not skip over the life insurance!

You work hard to take care of your loved ones, and insuring your life should be at the top of your list — so they’re protected in case something happens to you. Read up on how life insurance works so you get the best coverage for you and your situation.

artwork4-2When you’re ready to purchase life insurance (the best time is now!), keep in mind that life insurance should be a risk management strategy, not an investment.


Purchase a term life insurance, not a whole life policy, to protect your family and give you peace of mind. Term life policies are inexpensive, and most people under 25 can get them for under a dollar a day.

We recommend Policygenius to gather and compare life insurance quotes. 

Visit Policygenius today and compare life insurance quotes in minutes

Policygenius’ reliable service is simple, quick, and free. Their agents are not incentivized to sell you certain types of policies, so they are vested in finding a policy that truly works well for you.

On the topic of insurance, you should also shop around on your other policies to make sure you’re not over paying. Here are some quick and free resources you can use:

  1. Get a free car insurance quote from 6 carriers in your area (customers save an average of over $500 just by shopping around)
  2. Get a free home insurance comparison quote (some insurance companies will charge you a whole lot less for the exact same coverage – don’t overpay)

On The Way to Wealth

[bctt tweet=”Building a healthy financial mindset is the first step toward wealth.”]

When you complete all 5 steps in this personal finance checklist, you’ll be on your way to building a wealthy and rewarding future for yourself and your loved ones.

To learn more about building wealth…

Get Richer Sleeping eBook & Financial education emails

More From Finance