Assessing Your Financial Landscape
Assessing where you stand today is a big part of the path towards prosperity that we begin with our clients. It’s hard to determine where you want to go, if you don’t have a good grasp of where you are starting from. In order to do that, we need to look at your income, expenses, assets, and debts. Here is a guide to get you started.
Income Assessment
Your income is the financial foundation upon which you build your future. Begin by documenting all your sources of income, including your salary, investments, rental income, and any other sources. Calculate your monthly and annual income to get a clear picture of your earning potential. Here is where it is important to understand if your income is fairly constant or if it is variable. Variable income would come from things like commission, bonuses, side hustles, etc.
Expense Analysis
Understanding your expenses is crucial for financial planning. Categorize your expenses into essentials like housing, utilities, and groceries, and non-essentials such as dining out and entertainment. This breakdown will help identify areas where you can cut back or optimize spending. When calculating your spending, determine your monthly cost.
Asset Inventory
Assets are the assets you possess, and they can play a vital role in your financial journey. List your assets, including savings accounts, investments, real estate, and valuable possessions. Knowing your assets' value gives you a sense of your overall financial worth.
Debt Evaluation
Debt can be a roadblock or a tool to prosperity, depending on how it is used. List all your outstanding home and auto loans, student loans, credit card balances, and other forms of debt. Calculate the interest rates and minimum payments for each. This will help you prioritize which debts to pay down first.
Setting Financial Goals
Now that you have a clearer picture of your financial landscape, it's time to set achievable goals. Whether it's building an emergency fund, paying off debt, or investing for retirement, defining your objectives will guide your financial decisions.
Creating Your Personalized Plan
With your financial landscape thoroughly assessed and your goals in mind, you're ready to create a personalized financial strategy. This will serve as your roadmap to financial prosperity, outlining the steps you need to take to achieve your objectives.
At Prosperity Launch, I specialize in assisting individuals like you in this journey. My financial coaching services are tailored to your unique financial landscape, helping you make informed decisions and work towards a more prosperous future. Remember, assessing your financial landscape is the first step towards taking control of your financial destiny.
No matter where you are in this process, it will benefit you to talk to a Financial Coach about creating your own personalized strategy. Take the first step and book a free Q&A call with me today!