December 6, 2023

Financial Questions to Ask Yourself

You may have questions you’d like to ask a financial expert, but did you know there’s also value in asking yourself some questions about your money? These queries can help you organize your finances to spend efficiently, save more money, and achieve your goals, such as retiring comfortably.
While making money might be straightforward enough (you work and receive a pay check), using your hard-earned money to improve your quality of life and achieve your goals can be less clear. Healthcare expenses, education, and keeping up with daily expenses (plus inflation) can be all-consuming.
Fortunately, good money management can help you think big-picture as well as identify small-scale ways to improve your finances. And checking in with yourself can be a vital step.
So here are 19 questions to ask yourself about money that can help you save, spend wisely, and retire well. They’re grouped into categories (baseline, weekly, monthly, and annually) to make them easy to navigate.
Benefits of Keeping Yourself in Check Financially
Taking stock of your financial circumstances is more than a box to check off or a simple chore. It has numerous benefits for your bank account and mental health, such as:
• Reflecting on and changing your spending habits
• Creating a plan for achieving financial goals and building wealth
• Gaining control over your finances and reducing stress
• Adopting an investment style that fits your needs and risk tolerance
• Reviewing your tax burden to see if allocating pre-tax dollars can boost your financial potential
• Understanding how you can increase your financial security through budgeting and saving
• Fostering a sense of confidence and independence
Now it’s time to dive into the questions themselves, including ones you can ask as a baseline, weekly, monthly, and annually to help keep your finances on target.
Baseline Questions to Ask About Money
Now that you know the benefits of investigating your finances, start here. These questions to ask about money can help you lay the groundwork for where you want to go financially. It’s a good idea to refer back to them throughout the year to stay on track.
1. What Do I Want Retirement to Look Like?
A precursor to financially preparing for retirement is asking yourself what you want it to be like. For instance, you might imagine yourself vacationing in foreign countries throughout the year or taking it easy at home with an occasional visit to the golf course. You might also consider part-time retirement, where you work around 20 hours a week, whether to pursue a passion project or earn extra money.
In any case, your desired retirement will determine your financial needs once you leave the workforce. Developing as detailed a picture as possible will help you answer the next question.
2. How Am I Preparing for Retirement?
Planning for retirement is more than starting a retirement fund contributing to a 401(k) or IRA (although this helps!). Your retirement age determines your healthcare situation, Social Security income, and investment strategy.
For example, if you’re planning on retiring at an older age, you’ll receive higher Social Security distributions, and your investment accounts can stay aggressive, earning you more money.
As a result, a sophisticated approach to retirement is crucial. Planning early and in depth will help you build wealth and afford the lifestyle you want. Foundational elements of a healthy retirement approach include diversifying your investments, figuring out when you can retire, and identifying your target annual income.
3. How Much of My Budget Should Be in Investments?
There’s no one universal rule that dictates how much you should invest per pay check, and everyone’s financial circumstances are different. However, the following four guidelines can help you see where you are and then ensure you’re investing a sensible amount:
a) Investing a specific amount might substantially lower your taxes. For example, if you make 95,000 and put 20,000 pre-tax into investments, you’ll drop your tax bracket and pay a lower percentage of your pay check to the government.
b) Taking advantage of any available employer match is critical. If your employer-sponsored 401(k) usually has matching funds up to a certain percentage, budget to snag it. For example, if your employer will match the first 5% of your pay check contributions to your 401(k) plan, it’s wise to invest up to that amount to double your investment. It’s free money, and that’s hard to beat.
c) Sticking to your retirement plan is key. A detailed retirement plan should define a target amount to invest every month. For example, your plan might require you to invest 1500 a month in an IRA. If you’re not saving for retirement already, it’s not too late to start a retirement fund.
d) Your debt burden might be more pressing than depositing money in a retirement account. For example, let’s say your investment portfolio has an estimated return of 6%. However, you also have credit card debt with an APR of 25% and an auto loan with a 7% interest rate. These debts are accruing faster than your investments. Therefore, it’s a good idea to pay them off ASAP so you can invest efficiently.

4. Do I Need to Have a Financial Advisor?
If you feel in over your head when asking yourself financial questions, a financial advisor can help. Financial advisors create customized financial plans and investment strategies. While they usually are competent across most financial subjects, you can also get specialized financial advice.
Remember, financial advisors charge you for their services. Usually, you’ll pay a percentage of the assets managed (around 1% for a human advisor, while robot-advisors can be as cheap as 0.25%) or a flat fee. However, if you’re feeling lost trying to organize your finances, the price can be well worth it.
5. How Can I Improve My Financial Literacy?
From student loans to home ownership, the financial world has many complex aspects. If you are feeling as if you could use more insight in one or more areas, educate yourself. There are plenty of books, podcasts, and websites that share knowledge on a multitude of financial topics. It’s also likely that your financial institution has content on money topics.
6. What Are My Financial Values?
Asking yourself this question can help shed light on your money mind-set. Your financial values drive your decisions, whether you’re aware of them or not. For example, you might scrimp and save every penny but not pay any attention to investment opportunities. This value of preserving rather than growing your cash could be detrimental to your long-term financial health.
Or, you might buy luxury items as status symbols but be unable to afford a much-needed vacation. Writing down your financial values and asking yourself if you need to change any of them can help you evaluate your beliefs and direct your money to what matters most.
7. Am I Happy with My Job?
This question could help you understand your financial and/or emotional health. For example, your job might be financially stable but unfulfilling. In that case, you might need to weigh if it’s worth continuing in a job you don’t enjoy.
On the other hand, your job might not provide the income you need to reach your financial goals and retire comfortably. In this situation, you might consider whether you should ask for a raise or look for a better-paying job. Boosting your income might require going to school part-time to get a degree or evaluating the pros and cons of a part-time job.
The Takeaway
Managing your money well is an important responsibility, and it’s one that requires frequent check-ins to ensure you’re accounting for life’s twists and turns. The path to building wealth can involve asking yourself questions annually, monthly, and weekly to assess how you’re doing. You can then make necessary adjustments from tweaking your budget to opening a retirement account that keep you oriented toward your goal.

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