7 in 10 Americans struggle with financial stability, be it managing bill payments, curbing spending habits, or starting a savings account. In fact, a survey revealed that an unexpected expense of $1,000, such as emergency medical bills or unanticipated car repairs, could push nearly 60% of all Americans into debt!
The constant stress from unstable finances can take a toll on your life. Therefore, it’s important that you evaluate your finances periodically and assess which financial decisions and activities are negatively impacting your financial health.
In this blog post, we’ll look at some tips and strategies that can help you take control of your finances:
1. Determine Your Net Worth
Rather than leaving your finances to chances, we recommend that you crunch some numbers to evaluate your current financial status. Start by calculating your net worth—it’s the difference between what you owe and what you own. Subtract your liabilities (mortgage, credit card debt, consumer loan, etc.) from your assets (your home, investments, cash, etc.) to arrive at a net worth figure. You can always get in touch with our financial advisors in Washington to help you in this regard.
Calculating your net worth over time allows you to assess your progress, identify areas that need improvement, and highlight your successes.
2. Set Goals And Create A Monthly Budget
Creating a personal budget is one of the easiest ways of staying on top of your finances. It can help you plan for expenses, eliminate unnecessary expenses, and save for future goals and emergencies.
There are several ways to create a personal budget, and all of them involve figuring out your income and expenses. Keep in mind that these figures fluctuate over time.
Once you’ve made the projections, subtract expenses from your income. If you have additional money left over, decide on how you want to invest, save, or spend the money. If the expenses exceed your income, you may need to look into areas where you can potentially trim expenses or ways in which you can increase your income.
3. Build An Emergency Fund
It’s always wise to set aside money for emergencies. An emergency fund will help you keep up with regular expenses in case your income is interrupted.
Traditional guidelines for securing a financial foundation dictate that your emergency fund should cover three to six months’ worth of living expenses. So, when evaluating your financial health—especially with the recent economic uncertainty—think about ways you can divert money to your savings and build an emergency fund.
Hire A Financial Advisor To Meet Your Financial Goals!
Our expert financial advisors can help you create a game plan that puts you on track to achieve your long-term financial goals.
Our team also offers retirement incoming planning, life insurance for federal employees, private wealth management, estate planning services, and more in Washington, serving the residents of Poulsbo, King County, Bainbridge Island, Pierce County, and Seattle.
Get in touch with us for more information.