Much like an annual physical exam ensures good bodily health, a yearly financial check-up is vital for long-term stability and growth.
Experts say that taking time once a year to review your money matters helps identify risks, plug gaps, and realign your goals. Here are five key financial vitals you should monitor annually.
Kuntal Bhansali, Founder of Fydaa, says, “Assess your income-to-expense ratio — make sure your expenses are in proportion to your income and leave room for savings. A good ratio provides flexibility for emergencies and long-term investments.”
Shruti Aggarwal, Co-founder of Stashfin, adds, “A consistent surplus, however small, signals healthy money management.”
To make this work, follow the equation: Earnings – Savings = Expenses, not the other way round. As Pankaj Nawani, CEO of Carepal Secure, notes, “If you want to save, save first and spend later. Expenses always rise in sync with income.”
Unexpected events — job loss, illness, or sudden expenses, can derail financial stability. Experts recommend
Bhansali advises, “Your emergency fund should be in a liquid account. It cushions you against shocks and helps you stay financially stable during uncertain times.”
Aggarwal agrees, “Keep 6–9 months’ worth of expenses parked in an easily accessible account. This safety net is your first line of defence.”
Ideally, your total loan obligations shouldn’t exceed 30–40% of your take-home pay.
Bhansali warns, “Debt must be kept in check. Consistently high EMIs reduce flexibility and increase vulnerability during emergencies.”
Aggarwal adds, “A high debt-to-income ratio is an early warning sign of financial stress. Regular monitoring can prevent future debt traps.”
Bhansali recommends, “Check the performance and diversification of your investments across equity, debt, gold, and fixed income. They should reflect your risk appetite and long-term goals.”
Nawani reminds investors not to underestimate compounding. “Too much chopping and changing in investments feeds your ego, not your returns. Let compounding do its magic.”
Many ignore insurance and credit scores, until a crisis hits. Adequate life, health, and asset insurance protect against financial shocks.
Bhansali advises, “Proper insurance coverage and a healthy credit score are vital. They secure you against risks and improve access to quality financial products.”
Aggarwal concludes, “Timely repayments help maintain a strong score and unlock better borrowing options.”
Simply put, financial wellness isn’t about luck — it’s about discipline. As Nawani puts it, “Avoid relying on one income stream, avoid idle savings, and never skip your financial check-up. Doing this consistently is almost a guarantee of financial security.”
A yearly review of these five vitals ensures your financial system remains strong — ready to face uncertainties and grow steadily toward your goals.