Many of us receive our bank statements at the end of the month to find we spent more than we thought. That is when we start to evaluate finances to see where we can cut costs. To avoid this problem you can create a monthly budget and find a way to manage your debt. Gaining financial independence should be an important goal for you and your future. We get so busy that we miss the opportunity to take action that will influence our financial well-being. Taking the time to evaluate finances is the first step in tacking action and developing a plan.
Ways to Help Evaluate Your Finances
Here are some tips that will help you evaluate finances for a strong financial future and achieving financial goals.
- Create a monthly budget. Determine how much your take-home pay is including salaries, interests and spouse’s income. Next, estimate your expenses by keeping track of how much you spend in a month. You can easily track you spending by reading through debit card statements and saving your receipts. Divide your expenses into fixed costs, those expenses that do not change from month to month and flexible expenses that do change. Finally, figure out the difference by subtracting your total expenses from your total income to get the difference.
- Build an emergency fund after you create a budget to protect the money you are saving for your future. Your emergency fund will need to cover between three and six months’ worth of living expenses. Account for your emergency fund when reevaluating your finances so that you can handle unexpected costs. Rework your budget so that you can divert money to your savings account to start growing your existing fund.
- Manage your debt by paying them off a little at a time. Whether it is a student loan or credit cards take time to evaluate on how to effectively pay down your loans. Reducing these payments will help you to improve your financial well-being along with your credit score.
- Review your retirement assets and documents as life’s circumstances change and you want make everything is up to date. Even if your retirement is a long way off you may have to make adjustments to your portfolio. Make sure that your current investments reflect the risks you are willing to take and the time frame. Reviewing your portfolio also tells you if it is time to increase or decrease your investments. Review your legal documents along with beneficiary information every year making sure they are up to date.
Contact out office today to set up an appointment that will get you on the right track to secure your financial future.