It is important to periodically gauge your financial health to make sure you’re on track to meet your financial goals. We recommend taking a look at your overall financial health at least once a quarter, roughly every three months. Checking in on your finances often will help you stay on track and pinpoint potential problems early so you can make necessary adjustments.
The following are three things to look at when gauging your overall financial health.
Your Net Worth
Your net worth is the big picture number of where you stand financially. Net worth is the difference between your assets and debts. It is calculated by subtracting your debts (liabilities) from the value of your assets (including cash, stocks and bonds, retirement accounts, real property, and other valuable items).
Knowing your net worth allows you to see the progress you’re making toward your financial goals. Ideally, your net worth grows every year. If you find that your net worth is in the negative or if growth stalls, it is an opportunity for you to course-correct.
Your Retirement Plan
Is your retirement plan on track to fund the retirement you want at the age you want it?
Assess your retirement accounts and ensure the projected growth for the type of investments you hold and the amount that you’re currently contributing is adequate to get you to the number you need to be at.
Take a look at the fair market value of any assets you plan to sell to help fund retirement. Ideally, these assets are projected to appreciate by the time you plan to retire.
Two quick tips on retirement savings:
- The earlier you begin to save for retirement the better. Compounded interest helps wealth grow and the longer funds remain in financial securities (stocks) the more easily they can bear market fluctuations.
- Maximize employer matching retirement funds for your 401(k) or 403(b) by contributing the amount necessary to get the most in matched funds your employer offers.
Meeting Financial Goals
One easy way to gauge your financial health is to see if you are meeting financial goals. If you are falling short of your savings goals (or paying off debt goals), then it is time to revamp your budget or get back on budget and rein in your spending.
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The Law Office of Barbara B. Braziel helps people get out of debt. We offer free consultations to people of Savannah, GA and the surrounding areas, including Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.