Do you know where you stand financially right now? Do you know how you’re doing? Are things looking good or bad?
Most of us don’t. It’s not an exciting topic. Nobody wakes up wondering how their finances are doing. We want more money and less stress. That’s it. That’s what I want you to have at the end of this article. I want you to cut out the stress out of your life.
What should you look at to see where you stand financially to figure out what to do next?
How are your expenses?
It’s important to see how much money you have going out on a consistent basis. Making big money is exciting and all, but is worthless if you spend it all.
There are two types of expenses to keep in mind:
- Fixed. There are the expenses that you’re stuck with whether you want to or not. You agreed to it. This could be your cell phone contract or gym bill (both are difficult to get away from).
- Variable. These are the expenses that change on a monthly basis. This is your food, going out, and any other expense that can pop up during the month.
Have you been looking at your expenses? If they’re too high, your goal should be to start slowly cutting back until your spending an optimal amount of money on a monthly basis. The goal is keep more of your money than you spend.
Do you have any credit card debt or debt in general?
What’s your debt like? The only thing you can really do is to gather the paperwork (online and papers around your home). Then you can arrange your debt. I would arrange it from highest to lowest balance.
Once you arrange your debts. you can create a plan to tackle them. You can go after the lowest balance or the lowest interest first depending on how emotional you are.
How’s your savings account?
Do you have any money in your savings account? Could you survive if you lost your job tomorrow? I know that nobody wants to think about getting fired, but it happens to the best of us. Anyone can get fired at anytime for reasons beyond their control.
Are you ready for a rains day? If not, it’s time to start planning because those rainy days do happen.
How much income do you have coming in?
Has your income been constant or is it increasing? I always like to look at my income to ensure that I’m making moves that are right for me and my future. For example, when my income decreases I don’t mind if it’s for the better of my long term. I recently reduced ads on my site and decreased my income. While this does suck at the end of the day, I’m benefiting from building my site up for the future.
That’s how you can figure out where you stand financially. The good news is that if you’re not doing too well, you can bounce back!
Are you ready to make some changes to your finances?