Have You Checked on Your Financial Status Recently?

Last night, I thought of so many things I wanted to research to be posted on my blog which actually quite confused me on which I should be writing about first. Then it came to me that prior to reaching our aimed financial freedom, we should know where we are right now by having a personal financial check-up.

source : http://www.flickr.com/photos/tosaytheleast/ 

One way to know our financial status is to list down all our assets (such as savings, time deposits, investments, properties), our liabilities (such as loans, credit card debt, long-term amortization). Then from this data, we can see whether our current financial status is in good or bad condition. After this, we will now realize what actions we could have to improve our financial situation.

What I usually do is to list down my net salary for the month and subtract it my fixed monthly expenses (such as monthly rental, donation to different institutions and tithe) and my fixed monthly investments. Whatever the remaining balance will be, this will be my allowable expenses for the month. For people with credit cards like, it is a must that we always monitor our card expenses before it's too late! It may need a little bit of sacrifice on the start but as long as we understand that we will be reaping the rewards later on, especially with the investments, it will just be easy. This is what I have learned from my mentor Bro. Bo Sanchez.

Salary - Investments = Expenses

When we regularly do our personal financial check-up, we will know our current financial situation and we will be able to handle our finances properly. We can even maximize our finances such as investing them or even putting up a business for starters.

As I browsed through the internet, I have come across this article by a certain Leh, about the benefits of doing personal financial check-up which everyone could easily understand :

• You will know where your financial situation is now
• When you know your financial situation, you can  make actions accordingly
• When you do the right action, your finances will be safe and secure
• Your short and long term finances will be in a healthy place
• You will be free from debt or at least reduce it
• You will be optimizing your assets and your money
• You can cut any expenses which maybe not necessary
• You can multiply your money
• Lastly, you can retire stress-free... and enjoy your life along the way