Denise Neethling, Head of Marketing at Paymenow
In the journey toward financial freedom, measuring financial progress is a vital component that cannot be overlooked. Understanding one’s financial health and regularly reassessing goals not only fosters accountability but also empowers individuals to take control of their financial futures. With the right tools and strategies, anyone can navigate the path to long-term financial security and make meaningful adjustments along the way.
“Just like monitoring our physical health, keeping a close watch on our financial health boosts accountability and motivation,” says Denise Neethling, Head of Marketing at leading earned wage access (EWA) provider, Paymenow. “Visible measures of progress keep enthusiasm high, while recognising setbacks serves as a vital prompt to reassess and redirect our efforts.”
Here are some key considerations that can be useful when assessing your financial health ahead of 2025:
1. Build and maintain a budget
Think of a budget as your financial GPS. It helps you understand where all your hard-earned money is going and identifies areas where you might need to make changes. To start, measure your income against your monthly expenses. This assessment will illuminate whether you are living within your means or need to cut spending and find ways to boost your income. Budgeting apps can be very helpful in tracking spending, staying aligned with your financial goals and ensuring that you don’t incur unnecessary debt.
2. Examine your credit report
Just like you wouldn’t purchase a car without a thorough check, you shouldn’t ignore your credit report. This report is crucial in understanding your creditworthiness, which affects your eligibility for loans, credit cards, and more. You can access a free credit report annually from agencies such as such as TransUnion, Experian and CPB. Review the report for inaccuracies or negative listings, such as missed payments, and dispute any discrepancies immediately.
3. Continuously monitor savings and investments
Planning for retirement? It’s crucial to calculate the number of years remaining until retirement and assess whether you’re on track to meet your savings goals. Use retirement calculators to project your future needs and determine how much you should be saving each month to achieve your desired lifestyle.
Equally important is maintaining a safety net for unexpected emergencies. Aim to build an emergency fund that covers three to six months’ worth of living expenses. This fund should be easily accessible and kept in a separate account to avoid the temptation to dip into it for non-emergencies.
The key to effective financial management is to stay proactive – ensure that you regularly review your savings and investment portfolio and make necessary adjustments based on performance and changes in your financial situation.
4. Track your net worth over time
Regularly updating your net worth, which is the difference between your assets (what you own) and liabilities (what you owe), gives you a clear picture of your financial standing. Create a habit of tracking it quarterly or annually to observe trends and adjust financial strategies as needed. Increasing net worth indicates positive financial health and movement towards financial freedom.
5. Set incremental milestones
Breaking down big financial goals into smaller, achievable milestones can make the journey less daunting and more manageable. Whether it’s saving a set amount each month or reducing debt in increments, celebrating these small victories can provide a motivational boost and help maintain momentum.
6. Educate yourself financially
Continuous learning can greatly enhance your financial literacy and decision-making skills. Reading books, attending workshops, and following finance articles and blogs can provide insights into better money management strategies and investment opportunities, ultimately leading to smarter financial choices.
7. Ask an expert
We track and measure progress in many elements of our lives by, for example, seeking guidance from a dietician for weight management and/or a fitness expert for training. Your financial coach and an independent financial advisor can also help you measure your financial health and recommend changes to get you on track to financial fitness.
“As we all set goals for 2025, ensuring a healthy financial future requires regular measurement and evaluation of progress,” Neethling adds. “By leveraging tools such as budgeting, credit review, and checking net worth, individuals can stay focused on achieving their 2025 financial aspirations.”
ENDS
