Savers…investors…borrowers…entrepreneurs! Take note.
As the U.S. stampedes full steam ahead into a new political climate, some laws and regulations affecting personal money management will change, for better or worse. If you want to prosper and build your nest egg, it’s up to you to read and stay informed as the changes play out.
Still, crystal balls are in very short supply.
Interest rates might rise, stock markets might retreat. Taxes might go down, oil prices might go up. Credit might be less accessible to you, jobs might be more plentiful. Who knows??
There are so many global and economic factors that no one can predict the best money moves with great certainty, though many try. Still, don’t the most money-savvy folks lead the herd and react quickly?
No, you really don’t need to make snap decisions for fear you will miss your opportunity.
Money-smart consumers know their numbers. They take time to strategize with “what if…” scenarios. They set goals. They form a plan. So they’re able to be financially nimble! What a great position to be in, just as astute grocery shoppers know whether to stock up or avoid flash sales when they stumble upon them.
But how do you get positioned to reap the rewards? Set the stage with a birds-eye view of your current finances – where are you beginning for 2017?
Here’s how to paint that picture:
- Calculate your net worth. Your net worth statement = assets minus liabilities. Where’s the beef?
- Make a list of your saving/investing goals. Any added pork? What do you need/want money for, both for this year and for longer term?
- Add up what you spent last year…and what major items did you buy? This is your budget, in the rear-view mirror. Can you cut the fat?
- Review your credit report. If you will need to borrow money, good credit is a must. You might need to beef up your score. Start at this free government site to know if there’s something to squeal about.
So looking at these four things – net worth, goals, spending, credit – will give you a great overall picture of your finances. Then you can move strategically to improve and/or adjust and not get caught up in a follow-the-herd stampede.
Remember this is not a once-and-done look, but an assessment you can do every year. Since building wealth is more like running a marathon than sprinting a 50-yard dash, the good news is you have time to adapt – change lanes, pickup your pace, adjust your stride – to get ahead of the herd rather than get left in the dust!