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<p>Finances are like a garden; if you're not paying attention to them, you might miss small issues that can crop up like weeds and grow bigger. That's why conducting a financial checkup is a smart idea. All it takes is a little time and guidance on what to dig into.</p><p>Regularly monitoring your checking account is helpful, of course, but doing this deeper dive at least once a year can help you manage your money even better. For a well-rounded analysis, ask yourself these six financial questions.<span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:Calibri,sans-serif"> </span></span></span></p><img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/financial-checkup_body-2_1035834404.jpg" alt="A customer meets with a financial planner to review her investments" class="right_image" /><h2 style="margin-bottom: 11px;">How's my credit score?</h2><p>A credit score is the main indicator of your financial behavior to a lender. It shows how likely you are to repay debt or make payments on time. Because lenders look at this number to determine whether they'll give you a loan (for a car or credit card, for example), having a good score — typically 670 or higher — is extremely helpful. If your score is lower than this, you may be able to successfully get a credit card or a loan, but the interest will likely be far higher than it would be for people with good credit.</p><p>Keep in mind that credit scores depend on good credit reports. This means you'll want to occasionally read over your credit report to spot any potential issues such as erroneous information or missed payments, which can drag down your score. Visit AnnualCreditReport.com for a free copy of your credit report; you're entitled by law to receive one from each of three major credit reporting agencies — Equifax®, Experian® and TransUnion® — once a year.</p><h2><br />Am I paying off my debt the right way?</h2><p>Most people carry at least some debt, such as a mortgage, car payments or student loans. The key is not only committing to paying it down but also making sure you have an actual <a href="https://www.lifeandmoney.citi.com/lam/articles/money/managing-money/how-to-pay-off-debt">paying-off-debt</a> plan that you're carrying out.</p><p>There's no magic number for the maximum amount of debt anyone should have, says Lisa Whitley, a Washington, D.C.-based accredited financial counselor and chartered retirement planning counselor. But there is a difference in types of debt. If you have a mortgage or a car loan that you're easily paying off every month, this is "good" debt, according to Whitley. It's the "bad" debt that needs to be taken care of, she adds. For instance, if you've taken out a high-interest payday loan, you'd want to pay that off as soon as possible to avoid the mounting fees that can plunge you deeper into debt. </p><img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/financial-checkup_body-1_1319763433.jpg" alt="A couple meets with a financial advisor in their home" class="right_image" /><h2 style="margin-bottom: 11px;">Am I saving enough?</h2><p>Even if you are dedicating funds to paying down debt, building up your savings at the same time is also important for your financial future. Consider setting aside money in these three buckets:</p><ul><li>An emergency fund. If you aren't reserving any amount for big, unplanned purchases, like new brakes for your car, you may end up having to borrow money to fix them, which can increase your debt. Generally, experts suggest trying to save at least three to six months' worth of expenses, even if you have to start small and build this up gradually. This can ensure that, if you lose your job or have unexpected costs (for a medical need or otherwise), you could temporarily live off your savings.</li><li>Retirement accounts. You should be saving for your <a href="https://www.lifeandmoney.citi.com/lam/articles/milestones/retirement/the-new-retirement">retirement</a>, even if it seems like a long way off, because the more time you have to save, the more money you can accrue through employer-sponsored retirement programs such as a 401(k) or 403(b) plans or an Individual Retirement Account (IRA) to cover your living expenses. Keep in mind that the average benefit amount paid monthly by the Social Security Administration is currently $1,703.98 which may not meet all your needs.</li><li>A savings account. Consider creating a savings account to cover expenses that aren't necessarily an emergency but are nonetheless important to pay, like a replacement kitchen appliance or your child's overnight class trip.</li></ul><h2>Am I investing wisely?</h2><p>If you have retirement accounts set up or other investments (<a href="https://www.lifeandmoney.citi.com/lam/articles/money/managing-money/money-market-account-or-cd-account">certificates of deposit, money market accounts</a>, <a href="https://marketinsights.citi.com/Financial-Guidance/Investing/Mutual-Fund-Basics.html">mutual funds</a> or stocks, for example), you'll want to look at them, on your own or with a pro, to make sure they're on track and growing your retirement fund. If you don't, this could be a good time to talk to a financial advisor, who can advise you on making investments that could help build wealth for your retirement or, say, a down payment on a house.</p><p>But before you do this, Whitley says, review your objective goals — for example, having enough income for your kids' college education, for your retirement or to put toward a business you've always dreamed of running. Ask yourself: Have your priorities changed? Has your time horizon shortened or lengthened? Have circumstances shifted, affecting how you intend to use this money in the future? If so, you may want to save even more money or reallocate what you're putting into your various goal-focused buckets (say, education, retirement or new business). "Notice that none of these questions have to do with market performance," Whitley says. "You are on the right track when your portfolio matches your investment goals and that does not change with the ups and downs of the market."</p><p>It's worth noting that if investing isn't on the table for you right now, opening an interest-bearing savings account can be a good entry point. You can <a href="https://www.lifeandmoney.citi.com/lam/articles/money/savings/what-is-systematic-investing">contribute money to it on a schedule</a>, such as at every pay period or monthly. Once that habit is established, you might want to consider more advanced investing.</p><h2 style="margin-bottom: 11px;">Do I have enough insurance?</h2><p>It's easy to forget that insurance is a form of money management. "Insurance in some form or another has existed in human society for millennia for the simple reason that without it, we would not be able to afford to take any risk in our lives," Whitley says. "Without insurance, you have no option other than to absorb the economic consequences of risk yourself."</p><p>Consider homeowner's insurance, for example: If you didn't have it, "could you save enough money to hold in reserve to rebuild your home?" Whitley asks. "Most people cannot, so insurance is a form of leverage that allows you to spend a smaller amount of money, the premium, to guard against a risk that you would not be able to absorb on your own."<br /><br />Look over your current insurance policies to determine whether they offer you enough coverage. If, potentially, they don't, you may want to discuss that with an insurance broker and ultimately change your policy so that you're well protected. Your premiums would then go up, but paying a bit more in the short term may be worth it if it decreases the risk of leaving yourself or your family lacking sufficient coverage in the future. You might also want to explore insurance policies you don't already have, such disability or long-term care (this may cover home health care or assisted living home expenses) and think through how these might protect your finances if something were to happen to you.</p><h2>What estate planning should I be doing?</h2><p>This is another form of financial planning that is commonly overlooked since it requires thinking about topics many of us would rather not consider. It's important, however, because if you pass on without legal documentation such as a will, the courts in your state will decide who gets what, and this can create a mess of red tape for your relatives. Whitley advises thinking about reviewing an estate plan or <a href="https://marketinsights.citi.com/Financial-Guidance/Trust-Estate/">starting one</a> to make sure your affairs are in order. "An estate plan does you, as the deceased, no good at all," she says. "It is an act of love for the people you leave behind."</p><p><em>— With additional reporting by Geoff Williams and Life and Money by Citi editors</em></p>

It's Easy to Give Yourself a Financial Checkup — Here's How

<p>Companies typically issue a paycheck on a weekly, bi-weekly or monthly basis, and at first glance, it can be tricky to decipher the amounts that are listed. (This <a href="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/tagged-LAM-Paycheck.pdf" data-link-source="tiny">anatomy of a paycheck</a> can help.)</p>
<p>Your gross pay is what you&rsquo;ve earned before any deductions (like taxes and insurance premiums) and your net pay is the amount you take home after all deductions. At minimum, you can expect some or all of these deductions to be withheld from your paycheck, as required by federal law, the state where you work, and depending on your individual situation. Remember, it's always best to consult a tax advisor.</p>
<p><img class="right_image" src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/web_GettyImages-901583062.jpg" alt="group of friends watching the sunset over a city skyline"></p>
<h2>Familiarize yourself with these definitions</h2>
<h3>Federal income tax</h3>
<p>Money that goes to the federal government to fund their programs and services (like Social Security and Medicare), and it&rsquo;s based on your earnings and information you provide on your W-4 form.</p>
<h3>State income tax</h3>
<p>Funds that some states collect to fund public services and programs like public schools and public safety departments.</p>
<h3>Local income tax</h3>
<p>Funds that some local governments collect to support community-specific needs.</p>
<h3>Social security tax</h3>
<p>Money that funds the Social Security program, providing retirement, disability and survivor benefits. It's usually deducted at a rate of 6.2% of your gross earnings up to a certain limit set by the IRS.</p>
<h3>Medicare tax</h3>
<p>Money that funds the Medicare program, providing healthcare benefits to people who are eligible. It's typically withheld at a rate of 1.45% of your gross earnings.</p>
<p>There may also be other pre-tax withholdings depending on your location or specific situation.&nbsp; Additionally, there are common post-tax withholdings, such as medical plans, to consider.</p>
<h2>Structure your&nbsp;spending and saving</h2>
<p>The best way to <a href="https://www.lifeandmoney.citi.com/lam/articles/money/finance-101/top_financial_tips_for_teens" target="_blank" rel="noopener" data-link-source="tiny">stretch your first salary as far as possible</a> is to create a realistic budget. Start by tracking your income and all your expenses for a month, categorizing them into essentials like rent, utilities, groceries and flexible spending, such as dining out and entertainment. This will give you a view of where your money is going and help you identify areas where you can cut back.</p>
<p>You&rsquo;ll want to allocate part of your income to fixed costs (like rent and insurance), savings and debt repayment, while also designating some amount for dining out or other leisure activities. Having a money plan like this can help you live within your means, avoid unnecessary debt and make informed financial decisions. Consider using a budgeting tool or app you trust to simplify the process and keep you on track.</p>
<h2>Take advantage of company benefits</h2>
<p>If your company offers employee perks that you&rsquo;re not using, it can be as though you&rsquo;re leaving money on the table. Pre-tax commuter cards, gym memberships, medical coverage and a 401(k) plan, for example, can all significantly boost your overall compensation, so it&rsquo;s important to be aware of your benefits and make sure you&rsquo;re utilizing them if you can.</p>
<p>Participating in a retirement plan like a 401(k), especially if your company offers matching contributions, is particularly key because the match essentially provides free money for your future. Many companies also offer tuition reimbursement, courses or training programs that can enhance your skills and career prospects, so taking advantage of those benefits now can boost your income in the future.</p>
<p>Healthcare benefits are a key part of many employment packages, offering access to medical care, prescription drugs and sometimes dental and vision care. When it comes to managing healthcare costs, you might encounter two common options: Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). Both accounts let you set aside pre-tax money to pay for qualified medical expenses, but there are some differences &ndash; check them out below.</p>
<p><img src="https://www.lifeandmoney.citi.com/rcs/v1/media/lifeandmoney/akpublic/storage/retrieveMediaFile/66c3a7c1cf85a6230bcbb0c2" alt="How to get the most out of your first salary.png"></p>
<h2>FSAs vs HSAs</h2>
<h3>Flexible Spending Account:</h3>
<ul>
<li>Employer owned</li>
<li>Eligible if employee offers</li>
<li>Lose money if you don't use it</li>
</ul>
<h3>Health Savings Account:</h3>
<ul>
<li>Employee owned</li>
<li>Eligible if you have high deductive insurance</li>
<li>Money stays in account if unused</li>
</ul>
<h3>Key Common Factors</h3>
<ul>
<li>Paycheck earned</li>
<li>Pre-tax contribution</li>
<li>Employer may contribute</li>
</ul>
<h4>Both can be used for services and products such as:</h4>
<ul>
<li>Co-pays</li>
<li>Deductibles</li>
<li>Rx</li>
<li>Physical therapy</li>
<li>Glasses and contacts</li>
<li>Orthodontics</li>
</ul>
<h2>Prioritize saving&nbsp;</h2>
<p>It can be tempting to spend more once you start earning regular paychecks, but keep in mind that the sooner you start saving, the more this money will grow over time.</p>
<p>A good first move is to build an emergency fund of at least three to six months income to give yourself a financial cushion in case you end up with unexpected expenses or lose your job. You don&rsquo;t have to set aside the full amount at once &ndash; you can grow it gradually, putting a little money away each time you get your paycheck. You can even automate this so the amount gets deposited directly into a savings account without your having to remember to do it.</p>
<p>Investing is another way to get more out of your salary. <a href="https://www.citi.com/banking/personal-banking-guide/savings/a-guide-to-high-yield-savings" target="_blank" rel="noopener" data-link-source="tiny">High-yield savings accounts</a>, for example, offer a higher interest rate compared to traditional savings accounts. This means your money grows faster over time because you earn more interest.</p>
<p>Alternatively, <a href="https://www.lifeandmoney.citi.com/lam/articles/money/savings/cd-ladder-strategy-for-high-interest-saving" target="_blank" rel="noopener" data-link-source="tiny">certificates of deposit (CDs)</a> allow you to deposit a certain amount of money with a bank for a fixed period, like 6 months, a year or even longer, and an early withdrawal penalty may apply if the money is taken out before the end of the time period. In return, the bank pays you a higher interest rate than that of a regular savings account.</p>
<p>Getting a head start on saving can not only help you build a safety net, but also set a foundation for reaching future financial goals, such as buying a home or traveling the world.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>

Starting a new job is also a great time to set smart money habits so that you’re managing your expenses wisely and building up savings. These tips and strategies can help you maximize your first salary and take control of your finances. 

How to Get the Most Out of Your First Salary

<p>In her sophomore year of college, Nasrin Jafari was down to 23 cents in her bank account. It was a financial wake-up call.</p>
<p>In the following five years, the Los Angeles, CA, native prioritized and tracked spending to pull her finances out of the red and build up $50,000 in savings. After graduating with a degree in education and politics, Jafari took a teaching job.</p>
<p>But, just as she was launching her career, she faced another pivotal life event: her mother was diagnosed with Alzheimer's disease.</p>
<p>Her mother's illness and eventual passing led Jafari to reassess her own life path. She decided to tap into the nest egg she built and change the course of her life. "I knew that was going to be the opportunity where I could really lean on the savings I had created for myself," says Jafari.</p>
<p>Jafari quit her teaching job to volunteer at a nursing home and work with Alzheimer's patients. It was there that she started to pursue graphic design as a new career path. She also began work on a book, as an homage to her mom, that would express her encounter with the disease in words and pictures.</p>
<p>"I wanted to create a resource that people could use to help them navigate Alzheimer's&hellip; and in a way that brought some light and some lightness to this illness," Jafari shares.</p>
<p>Jafari has worked hard to save money and, in turn, create a life that allows her to pursue her passions. "Having savings is so important to being able to pursue that path with confidence, patience and kind of with a calmness," Jafari says.</p>
<h2>Try her smart saving tips:</h2>
<ol>
<li><strong>Set your savings goal. </strong>Think about your values and lifestyle and <a href="https://www.lifeandmoney.citi.com/lam/articles/money/savings/saving-money-hacks" data-link-source="tiny">set a goal that works</a> for you. "Understanding what your lifestyle is, and figuring out how much money is required to keep that up is really important to know when you're trying to save," Jafari says.<br><br></li>
<li><strong>Track monthly spending. </strong>Once you determine your long-term savings amount, commit to making it happen over time and <a href="https://www.lifeandmoney.citi.com/lam/articles/money/productivity/bullet-journal-financial-planning" data-link-source="tiny">track your spending</a>. "Keep that number in mind and then think about how much you would have to save every month to be able to reach that goal over the next three, five, six years," Jafari notes.<br><br></li>
<li><strong>Prioritize where your money goes. </strong><a href="https://www.lifeandmoney.citi.com/lam/articles/money/managing-money/how-to-create-a-budget" data-link-source="tiny">Make a list</a> of your monthly expenses, then set aside your designated monthly savings. Spend the remaining amount on what matters most to you. Whether that's taking a trip, eating at a new restaurant or paying down student loans faster, feel secure knowing that you are still saving towards your goal.<br><br></li>
<li><strong>Invest in yourself. </strong>Spend your money in a way <a href="https://www.lifeandmoney.citi.com/lam/articles/money/career/hobby-to-small-business" data-link-source="tiny">that invests in your personal long-term growth</a>. "Focus on what you want out of your own life, what goals you have, what dreams you have and how your money can make that possible," Jafari says.</li>
</ol>
<p>To learn how to create meaningful savings in your own life, check out the video above.</p>

How Savings Helped This Teacher-Turned-Artist Change Careers

<p>Every young professional wants financial security in life, and to know their money can provide them with the things that bring them joy. Getting to that point doesn't have to entail endless spreadsheets and intensive budgeting plans, but it can call for some strategic, life stage-specific thinking, according to pros.</p><p>"Financial wellness has to mean different things at different ages," says Robert Pagliarini, president of Pacifica Wealth Advisors in Irvine, CA, and author of "Get Money Smart: Simple Lessons to Kickstart Your Financial Confidence & Grow Your Wealth."</p><p>Pagliarini looks at it as a "path and plan for the future," explaining that actively taking steps to reach it "is what wellness is about." The key, especially when you're just starting out, is to find a way to balance your planning for the future with living in the moment, he says. These expert tips can help.</p><img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/defining-financial-wellness_body-2_974020662.jpg" alt="A woman reviews her finances on a laptop in a coffee shop" class="right_image" /><h2>Examine your money habits</h2><p>A good first step is to educate yourself on the <a href="https://www.lifeandmoney.citi.com/lam/articles/money/finance-101/credit-101">fundamentals of personal finance</a>, and then learn exactly where your money is going by mastering your cash flow, says Douglas Boneparth, president of Bone Fide Wealth in New York, NY, and co-author of "The Millennial Money Fix."</p><p>"Shooting from the hip is reactive," says Boneparth. "You always want to be proactive. If you're organized, you may find opportunities to refinance your loans, or be able to restructure your payment plan," he says. "Then you'll spend less time worrying about debt, and maybe you'll have more time to think about increasing your income."</p><img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/defining-financial-wellness_body-1_1415389245.jpg" alt="A woman buying groceries removes money from her wallet" class="right_image" /><h2>Invest your time</h2><p>Young adulthood is a critical stage to be investing in ways that don't immediately add to the bottom line, says Pagliarini. "Most twenty-somethings feel they're totally broke because they're financially broke," he says, "but I view wealth in a different way. Wealth isn't just stocks and bonds. What they have going for them is time. And time is probably the most valuable asset any of us will ever have."</p><p>If you use that time to improve yourself — to become more confident, to network, to develop more skills, to build what he calls "human capital" — your investment will pay off financially down the line, says Pagliarini.</p><p>Take Brooklyn-based entrepreneur Ben Brown, for example, who started his own enterprise, the Association for Young Americans, while working full-time at a consulting firm in his 20s. "I was working in a demanding job, traveling quite a bit, and then was trying to start and build a company at night in my hotel and on the weekends back home," says Brown. He made a host of financial sacrifices, such as taking a pay cut and funding the first year of the business with his own earnings, but he views them positively, as investments in his own future. "My financial goals are similar to other young entrepreneurs," says Brown. "I want to be comfortable, but I'm willing to forego some of that now to get it in the future."</p><p>With a vision and a plan in place, a crucial shift takes place: Suddenly you'll find that saving money doesn't become a game of depriving yourself of what you want, but rather one of allocating money to where you want it to go.</p><p>That said, you can still <a href="https://www.lifeandmoney.citi.com/lam/articles/money/family/personal-financial-planning-for-families">start saving for your future</a> even if you don't yet have a clear picture of what you want from the rest of your life, Pagliarini notes, because the simple act of saving can be transformative psychologically. It just takes a "start small" mindset. "If you go from someone who doesn't save to someone who saves a dollar a day, you've changed your identity," and that can bolster your financial wellness. It's not about the amount, but rather about "changing who you think you are," he says "That's much more significant."</p><p> </p><p><em>— With additional reporting from Life and Money by Citi editors.</em></p>