A new year is well underway, and it’s time to begin putting your personal finances in order.
However, let’s start by giving you a big high five for taking the initiative to make this decision. Being proactive in how you manage your personal finances is your first step, and it will eventually give you that financial freedom you desire.
As for our part, we will make sure to provide you with sound financial advice on a regular basis, making this post the first in a series of related articles on mastering personal finances. Let’s get to it!
Build your current personal finances worksheet
Before deciding on what your financial goals are, examine your current stand. It doesn’t matter whether you have a single dollar or a million dollars, you need to step back and assess what your financial situation currently looks like, so you could set yourself up for the success in the future.
Take a few minutes and make use of a net worth calculator. There are many of them available online for free.
After you are done, write down your “total debts,” “total assets,” and your “net worth.” Put this information in a location that’s safe, as later on you will want to have it.
How to work with your personal finances worksheet
If your current net worth is low, perhaps even negative, don’t worry about it. Remember, the goal here is to educate you on how to reach your financial goals. For those of you who are retired and already sitting on a healthy nest egg, this one is not for you.
Something else you need to do is check your credit report. Make sure it contains accurate information. It is crucial for you to take control of your personal finances.
The Fair Credit Reporting Act (FCRA) and the three nationwide consumer reporting companies (TransUnion, Experian, and Equifax) offer a free credit report for you annually. Take advantage of the different agencies and request your free report from one agency every 4 months.
If you go to AnnualCreditReport.com, it’ll get you started. Keep in mind that this free service is government-mandated, so you will never be asked for a payment.
Master personal finances: Activities for this week
See what you can do to better your financial health and gain financial freedom faster with our handy list:
- Bring together 3 friends that are willing to join your resolution to master personal finances.
- Fill out the Net Worth Calculator.
- Get copies of your credit reports.
Still looking for more? Feel free to check out our comprehensive personal finance guide to learn more about managing your budget and staying financially healthy.
[Featured image credit: adventtr via Getty Images/ Image cropped]