We are fast approaching the end of 2019 and it is time to take stock of our financial health. Financial health is the state of one's finances and includes many dimensions such as spending, savings and money set aside for retirement. Like physical health, financial health is a key to a happy and successful life. Creating a sound financial present lays the foundation to a stable and secure financial future.

Here are some tips to improve financial health: 

Seek Professional Investment Advice

There is no free lunch in life and more so, in the financial arena. Investment decisions and portfolio management is best left to seasoned professionals with proven money management skills instead of relying on the advice of a favorite relative, the neighbor next door or the friendly panwalla.

Do a Proper Due Diligence

Due diligence is very important to measure the reliability and soundness of an investment. Ashok Shah, Partner, NA Shah Associates, advises investors to do a proper due diligence prior to taking any investment decision and maintain a proper risk-reward ratio. "It makes no sense to take a huge risk for the sake of minimum rewards," he says. Mr Shah also suggests that investors should not invest in something that they do not understand and play safe by sticking to larger institutions.

Manage Money

The proverb 'Cut the cloth according to your coat' dates back to the pre-readymade clothing era. People should spend in accordance with available resources and circumstances, rather than succumb to the temptation of living a financially reckless life under societal and family pressures, and then waste a lifetime to make good the accumulated debts. To quote Warren Buffet once again, "If you buy things you don't need, you will have to soon sell things which you actually need".

Dinesh Rohira, founder, 5nance.com, emphasizes the 50:30:20 rule, whereby 50 per cent of the money should be devoted to spending, 30 per cent should go for investing and 20 per cent for lifestyle management. He also stresses on starting small, taking adequate insurance covers and doing proper tax planning.

Take Health Insurance

'Health is Wealth' goes a popular saying. As a logical corollary, health ailments can make a serious dent on wealth. Many people commit the blunder of relying completely on the medical cover provided by their employers. This amount may be insignificant to tide over serious health conditions that could rear their head. An adequate health cover is an absolute must to tide over medical emergencies.

Opt for a Term Plan

Life is uncertain, death is the only certainty and can come knocking when least expected. The rare few may bequeath enough assets to their immediate family members, but the vast multitude does not enjoy such largesse. In such cases, a term insurance plan could mark the difference between leaving behind a financially weak family and providing them a decent and comfortable life. As the popular saying goes, "You do not buy a term plan because you will die, but rather because your family will live." While deciding the term insurance scheme, one should keep the cover amount and premium amount in mind.

Avoid Credit Cards

Warren Buffett had dubbed derivatives as "financial weapons of mass destruction." And he was proved right by the crisis that enveloped the financial world in 2008. Credit cards can be equally disastrous. The countless advertisements on EMIs, low-interest rates and personal loan tend to entice many an unsuspecting individual. Credit card holders either use easy credit card money to spend beyond their payment capacity, or end up shuffling credit card money i.e. taking a loan from Credit Card A and using Credit Card B to pay the outstanding amount. And before they know it, they get entrapped in the vortex of a debt trap.

Plan for Retirement

Retirement planning implies a thorough investment plan for the future that will create a decent corpus at the age of 60 to provide financial support in post-retirement years. Planning for retirement is of crucial importance in current times that are marked by rising life expectancy and shorter work spans. According to World Health Organization (WHO), the average life expectancy of the global population stood at 72 years in the year 2016 and is only headed higher.