Getting your financial life in order starts with asking yourself some basic questions and giving yourself some honest answers. Here is a collection of some of those questions, the answers are up to you:
[Late addition: in response to comments readers of this article posted on some other sites, I intend to start a series of posts that individually addresses each of the questions I outline in this post. The series will start later this week and will run for several weeks. I hope my readers find it useful.]
1. What are my goals in life and am I on the right track to achieving them?
2. Am I maximizing my earnings potential?
3. Am I saving enough money for my old age?
4. If I die tomorrow, will my family have enough to take care of their needs?
5. If I am disabled tomorrow, will I have enough to support both my dependants and myself?
6. Is my family financially and physically prepared to handle a natural or man-made disaster?
7. If I lose my job tomorrow, do I have enough liquid assets to support my family for several months?
8. Do I have enough medical insurance coverage to handle a catastrophic health problem for a member of my family?
9. Is my investment portfolio sufficiently diversified?
10. Is the asset allocation of my investment portfolio proper for my risk tolerance?
11. Am I getting a sufficiently high return on my investments, compared to the level of risk I am accepting?
12. Am I spending too much of my income?
13. Is there a way for me to reduce my spending?
14. Can I handle my current level of debt?
15. Do I need to be carrying any debt?
16. Is there a way for me to reduce the level of interest I am paying on my debt?
17. How do I rate my financial well being and the way I manage my finances?
Ask yourself these questions, and make sure you answer them truthfully. If you find that one or more of the answers you give yourself is not adequate, it's time to do something about it.
If it seems like there are too many things that you need to change, don't be overwhelmed. Pick one small task and take care of it tomorrow. When you are done with that one, move on to the next. You need to start somewhere and all you need to do is make sure that you are consistently moving in the right direction.