In step one we looked at why it’s good to have clear financial goals in place before doing anything else when it comes to owning our finances.
The next step is to look at your financial situation as a whole.
- List all of your debts
- List all of your assets
- List all of your weekly/fortnightly/monthly expenses
- List all of your goals
Let’s start with listing all of your debt. This can be a little overwhelming, especially if you’re in a bit of a pickle but it’s important. Debt would include anything like personal loans, car loans, credit cards, mortgages, and absolutely all Afterpay/Zippay payments waiting to be paid. Literally anything where you owe someone else money, even if it’s a bit of cash you borrowed from mum and dad that you’ve been meaning to repay.
Now listing all your assets next should hopefully cheer you up a little if listing your debt was a little disheartening. An asset is any item you own that has value. Things to include in this list would be your car value, superannuation balance (not that you can touch it for a million years but it’s always good to check in that the amount isn’t going backward), and any savings that you have. Other examples that I’ve got on our asset list are things like our laptops, cameras, music equipment and furniture (or home contents).
Next up is to list all the essential regular expenses that you have and the dates in the month that they are due. This would include your phone bill, car insurance, any home expenses like rates or water bills, regular car expenses like services. I even include things down to my license renewal and sponsor child payments.
Then we look back at the goals we wrote down in step one to see how well what we’re spending, what we owe and what we’re saving is aligning with those goals.
If you are looking at what you’ve written down thinking that your current situation isn’t looking great up against your goals, don’t stress! That’s why you do step two, so you can work out where things need to start changing.
So, see how you go working through these four steps and if you’re unsure you can always shoot me a message!
(Or Excel-ing, y’all know I’m an Excel girl)