The Importance of Knowing Your Financial Picture

Our country is currently facing some disturbing economic times. What does this mean for you? Instead of letting all the negativity in the news today bring you down, this is the best time to start looking at where your financial life is, and how it can be better.

Possibly, if home buyers going into their first home knew something about their own financial situation before getting a mortgage, we wouldn’t be facing this financial crisis today. I feel there is a real need for financial literacy education in our country today.

What can you do to help? You can assess where you are and try to make your personal situation better. Let each of us be a role model for others, especially our children.

First, let’s find out the honest truth:

1. Do you know what your personal financial picture is?

2. How much money do you owe, and what is the value of all the assets you own?

3. Do you have a written budget, or at least an idea of what your monthly budget is?

Don’t worry, you are not alone if you answer “no” to one or all of the above. Here are some things you can do today to start getting a better picture of where you stand financially:

* Organize your home filing system. If it seems overwhelming, do 15 minutes at a time. You’ll be surprised in what you can get done in just 15 minutes a day!

* Get a stack of statements together…YES, you MUST do this part (get the current bank statement, current investment account(s) statements, and all current loan and credit card statements together)

*… stop putting it off, and let’s take a look at how much is in your bank account! Also, stop ignoring the credit card statement and really look at the number in the “Current Balance” box. Is it shocking?

* If the credit card debt is eating away at your sanity every month, I guarantee there is a simple fix.. READY? Stop spending on credit cards! Make a concerted effort to live on less than you make while you are figuring out where you currently stand.

* Work on a written monthly budget. Know what all the loan payments are you need to make every month. Know what your housing, food, clothing, transportation and personal expenses are every month.

* Start trying to find “extra” money in your budget that can consistently go towards paying down debt, saving for retirement, or investing in a business.

You can dream about making it “big time” all you want…but if you don’t know where you are starting from, it’s hard to get a realistic picture of what it will take to get to where you want to go… so let’s get doing this thing!

I believe that the more each of us accepts responsibility for our own finances, the less we as a country have to face financial market meltdowns. Each of us must work on making our own lives better. Go forward with the belief that your life is what you make it and only you have control over your financial future!

Source by Rebecca Tervo

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