4 Ways to Evaluate Your 2019 Financial Status! We are still at the beginning of the new year and wondering where this year will lead and what lies ahead. One thing that is of major concern to most of us is finance: will we have enough money to pay bills, to save or send our children to school? One of the best ways to find out what your financial future will be is to find out your current financial status and work from there.
You can start by visiting this site to answer a few questions and then review their suggestions on how to improve your financial health (if necessary).
Yes, there are many tools to help you understand where your financial position is. However, often these tools make it too easy – they give us financial “status” quickly with a few clicks. Unfortunately, they don’t always teach us what the real problems are and how we deal with situations that we find ourselves today.
The following 4 elements can be used as metrics to measure your financial status and find ways to improve (or maintain) where you are now.
4 Ways to Evaluate Your 2019 Financial Status!
1. Debt Level
In simple terms, debt is how much money you owe. If your debt is very manageable and has declined since last year, you are on the right track. Continue to do what you do to reduce your debt level to zero so you can rest more easily while also increasing your FICO® Score. However, if your debt has increased or you only keep your debt levels endless in sight, find out various ways to help you pay off debt over time. While looking for the best way to reduce your debt, look back at your past activities and see why you might have so much debt to start with … then you can start working on changing those actions.
2. Net Wealth
Take your assets and reduce your obligations. Are the numbers positive or negative? Has the number changed over the past year? This is very simple, really: if you spend less money than you make, your net worth increases. If you spend more money than you make, your net worth decreases. In the last scenario, you might add more debt or use some of your savings, with one of those behaviors decreasing your net worth. Keep an eye on, supervise, on your expenses and you can see an increase in your net worth from year to year.
3. Credit Report
Have you checked your credit file recently? There are files, most commonly known as credit reports, with Experian, Equifax and TransUnion – three major credit reporting agencies. It is important to check (or all three) at least once a year for several reasons:
- Check whether someone might use your identity to get credit
- Review file information and make sure everything is correct
- Helps you see how you pay debts and manage credit
Five factors shape your score and all are related to what activities occur in your credit file in three reporting agencies. So, if you want your FICO® Score to be in good standing, you need to ensure that your files, and all five factors, are also in good standing.
Do you have enough savings and investments to get through difficult times? It’s always a good idea to have at least three to six months of cash available in the event of an emergency. Checking the amount of savings you have also lets you see how you manage your money. If you have a good amount of savings, that means you don’t spend too much money and are ready to face unexpected financial difficulties. If you don’t have savings, it’s time to start checking your expenses and find out how to set aside money every month … just in case.
Remember, just as you start a new year, you can start a new way of managing your money – if necessary. If you are fine and feel you have good to very good financial health, continue to do what you do and for 2019 it is even better than last year!