Establishing clear financial goals is the first and most important thing you should do when you’re doing a financial checkup. These goals will help you decide which “path” to take in your financial future.
Your financial health is just as important as your physical health so incorporating a regular wellness check on your personal finances is required in order to maintain the most accurate state of affairs. Consistent financial checkups enable you to determine what adjustments are required in order to stay in line with or exceed your economic goals.
A simple assessment reviews the following:
Subtracting your assets from your liabilities calculates your net worth. This assessment allows you to be clear about exactly what you currently own as opposed to what you currently owe. Thorough evaluation of your net worth will allow you to see how much debt to decrease and what assets to accumulate to offset any deficiency.
Calculating your debt to income ratio by dividing your debt payments into your monthly income. A favorable debt to income ratio is around 30% or lower, with 20% being ideal. Anything higher than 30% needs to be rectified as a higher ratio will adversely affect your credit scores and buying power by lowering your opportunities for credit and tradelines.
Setting clear short- and long-term financial goals can be challenging so here are a few steps I suggest you should consider to get your financial affairs in order.
*Create and follow a concise budget
*Take on side gigs to offset income
*Lower your mortgage and utility expenses
Your primary objective should be to increase your net worth by 5% to 7% or more, have a substantial emergency fund and ultimately build wealth so as to retire comfortably.
I am available to consult with you and your family about your financial planning and budgeting needs.