Download A Personal Finance Self-Evaluation Checklist

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Here is a personal financial self-evaluation checklist that can be used by beginners and veterans alike. It will help you organise your finances systematically and you go can well beyond these Five changes It has been developed from how to Conduct a Personal Financial Audit and my own audits which are done each December (see last years for example)

If you like the checklist, you can attempt answering and act on them – a few each week. A pdf version is available for download at the end of the post. The checklist is a set of questions with short observations and hopefully relevant links.

If you resolve to answer a couple of questions per week, I am confident that you will soon have complete control over your financial life.  Obviously this is not exhaustive but hopefully, will cover the important bases.

Looking for some confidence to DIY, try this: DIY Personal Finance: How long does it take anyway?


Act I: Preparation

  1. Is my life insured adequately? That is, will my family be able to handle their immediate, short-term and long-term goals in my absence?  Some people dismiss this as over-analysis and take a 1 Crore term policy! Trust me this analysis will take only 15 minutes. The paralysis occurs while choosing an insurer not while deciding the amount!
  2. Have I discussed with my spouse or nominee how the term insurance amount should be utilised in my absence? You can write a detailed note about this if your spouse finds it too morbid to discuss this. Just be sure to include the detailed note along with the policy papers. You can also include the contact details of a fee-only financial planner for guidance.
  3. Are I and my family members insured adequately wrt medical expenses independent of my employment? This seems like a no-brainer but I am appalled to see that people consider mediclaim expenses as a waste of money if they don’t claim and take employee benefits and their own health for granted.
  4. How ready am I to handle emergency expenses? You need more than 6 months or 12 months expenses. Remember that cashless hospitalisation does not mean cash-free hospitalisation. You still need to pay for ‘non-medical expenses’.
  5. How capable am I of replenishing my emergency fund if it gets depleted?! Don’t lock all your monthly inflows into EMIs and SIPs. You need a small buffer to replenish the emergency fund.
  6. Do I know what my net worth is? The only reason you need to do this is that it forces you to list all your investments and update their values.
  7. Have I listed all my goals: recurring, short-term (less than 5 years away), intermediate-term (5-10Y away) and long-term (10Y+ away)?
  8. Do I know the approximate but realistic current cost associated with my goals?
  9. Have I decided the asset allocation for my intermediate and long-term goals?  Short term is 100% debt! The asset allocation gives you a net portfolio return you are aiming for. For example if you expect 12% from equity and 7% (post-tax) from debt and would like to have 60% equity exposure, the net portfolio return is (approximately): (12% x 60%)+( 7%x40%)
  10. Do I know how much I need to save or invest for each of them? You need to use a goal planner with the net portfolio return and a reasonable inflation estimate. For retirement, you need to assume an interest rate post-retirement. Use something like 7% or so, for now.
  11. Do I know how much I can invest per month?  Analyse your cash inflow and outflow. Construct a pie chart and stare at it.
  12. If there is a shortfall how am I going to manage it?  Some options: postpone goals, reduce targets, increase investments down the line. Don’t make the mistake of increasing exposure to volatile instruments in the hope of compensating lower investments with higher returns. It could backfire terribly.
  13. Have I discussed all this with my spouse or partner? Have I written down an investment plan? A written investment plan helps everybody, especially those who cannot discuss financial matters with their spouse.

Act II: Action

  1. Do I know what category of instruments (eg. what kind of mutual fund) am I going to choose for my goals?
  2. Is my proposed portfolio diversified within each asset class?
  3. Have I begun investments as per the asset allocation decided?  Not all goals can be handled at the same time by everyone. Retirement is priority number one.
  4. Am I tracking my investments? Am I investing enough and as per the schedule assumed in the goal planners?
  5. Have I written a will?


Photo Credit: Brett Jordan (flickr)

Act III: Review

  1. Do I know the net return (XIRR) of my debt investments and equity investment? Do I know the net XIRR of the portfolio? Is this above or below the expected portfolio return used in the goal planners?
  2. Do I know what is the current actual value of goal portfolios?  Do I know how much are they actually worth? If I don’t invest anymore for these goals, how much would the current value grow to when I need the money?
  3. Do I know how many years I can survive on an inflation-indexed monthly income with my retirement corpus If I retire today? Let us call this X year.
  4. Am I increasing this X year by at least one year for each year that I work?  This is the true measure of a retirement portfolio.


Endnote: At the end of the day how successful we are with our finances is decided by how much money we have when the need arises – at which point XIRR or CAGR or IRR or whatever we wish to call it matters little. All we can do is make reasonable assumptions, invest in productive assets which is part of a diversified portfolio and hope for the best!

Download the personal finance self-evaluation checklist

you can use this robo template to create a start-to-finish financial plan:

Key features of the freefincal robo advisory software template


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About the Author M Pattabiraman author of freefincal.comM. Pattabiraman(PhD) is the author and owner of  He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Pattu” as he is popularly known, has co-authored two print-books, You can be rich too with goal based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management.  He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis. He conducts free money management sessions for corporates  and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)
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Do check out my books

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingMy first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.  It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantGamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantMy second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

The ultimate guide to travel by Pranav Surya

Travel-Training-Kit-Cover This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step.  Get the pdf for ₹199 (instant download)

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