Step 1: Examine Your Net Worth

TL;DR: Get a grasp of your finances in it’s current state.

Even if you’ve moved on from and debt is behind you, it’s still a good idea to take a peek at your finances. Never put this off!

Your net worth consists of what you have already and expected future cash flow. There are 2 main pieces to cash flow: income, and expenditures. Both of these we’ll cover later, but take a moment now to get everything together and see where you could make the most impact and improve your financial health.

I’d suggest using Personal Capital, which is what I personally use. I’ve connected my bank accounts, credit cards, and investment accounts all into my Personal Capital account to view all things in one spot.

Once you’ve gotten that, you can go to the “Cash Flow” section of the app and check out how your income vs. expenditures is. How is the ratio there – how much do you end up saving every month for your future? Do you have high expenditures you think you could cut down, or do you think raising your income is the best way to go about things?

You can also keep track of all your expenses/incoming checks in one place. This way, if you’re balancing multiple credit cards, you’ll know if anything suspicious has come up on any card by only going to one place. You’ll also be able to see how each of your accounts and your total net worth is growing over time, which is always nice.

Go ahead and do this! I think it’s important to take the time and figure this out, as this’ll inform your next steps.

Happy Net Worth’ing!

TheJKW

P.S. New posts every Sunday at 5pm CT!

P.P.S. Check out the TL;DR of TL;DRs here.