Did you know that the first week of August is National Simplify Your Life week? Simplifying your financial life can bring clear mindedness and a sense of freedom to our lives. I want to share a simple exercise to get started.
Take inventory of your assets and debts. This gives you a handle on your finances and simplifies your thoughts about money. There is power in knowing where you stand with your finances. This may sound scary, but I find most people are relieved when they go through this process and have it all on one piece of paper. It’s like going on a diet, you must first step onto the scale. Think of this as your money scale.
Write down on a sheet of paper all your assets in one column and all your debts in a second column. Make sure to include bank savings accounts, retirement accounts and your home in your assets. Debts should include your mortgage, student or car loans and any credit card debt. Total each column to see how you are doing. Analyze and think about your results, good or bad. Now is not the time to be critical; keep things simple and focus on one goal at a time to improve your scale.
As you set your goal and act, this money scale becomes the indicator of your progress. Completing this quarterly will help ensure your financial goals are on track for the year. There is something satisfying about finally knowing where things stand versus the uneasiness most people experience when they don’t have a clue about where things are. Simplicity creates freedom!
Information in this material is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.
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