We're still at the beginning of a new year and wondering where this year will lead and what lies ahead. One thing of primary concern for most of us is finances: will we have enough money to pay the bills, to save or to send our children to school? One of the best ways to find out what the financial future will be is to discover our current financial status and work from there.
You can start by visiting this site to answer a few questions and then review their advice on how to improve your financial health (if it needs improving).
4 Elements to Help Gauge Your Financial Health
Yes, there are plenty of tools to help you get a grip on where your finances stand. However, oftentimes these tools make it too easy - they give us our financial "status" quickly with a few clicks. Unfortunately, they don't always teach us what the actual problems are and how we got into the situation we currently find ourselves.
The following 4 elements can be used as metrics to gauge your financial status and figure out how to improve (or maintain) where you are today.
The degree of Debt
In simple terms, debt is how much money you owe. If your debt is very manageable and has decreased since last year, you're on the right track. Keep doing what you're doing to get your debt level down to zero so you can rest easier while also increasing your FICO® Score.
However, if your debt has increased or you're simply maintaining your debt level without any end in sight, find out the different ways to help you pay down your debt over time. While figuring the best way to lower your debt, look back over your past activities and see why you might've gotten into so much debt to begin with... then you can start working on changing those actions.
Net Worth
Take your assets and deduct your liabilities. Is the number positive or negative? Has the number changed over the past year? It's pretty 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 latter scenario, you've possibly added more debt or used some of your savings, with either of those behaviors lowering your net worth. Keep an eye, a close eye, on your spending and you can see your net worth increase year after year.
Credit Reports
Have you checked your credit files recently? There's a file, most commonly known as a credit report, with Experian, Equifax and TransUnion - the three major credit reporting agencies. It's important to check on (or all three) at least once a year for a few reasons:
Check if someone might be using your identity to gain credit
Review file information and make sure everything is correct
Helps you to see how you're paying debts and managing credit
Five factors make up your score and they're all related to what activities are taking place within your credit files at the 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.
Savings
Do you have enough savings and investments to get you through a rough period? It's always a good idea to have at least three to six months of liquid cash available in case emergencies arise. Checking the amount of savings you have also allows you to see how you're managing your money. If you have a good amount of savings, it means you're not overspending and are ready for unexpected financial predicaments. If you don't have any savings, it's time to start checking your spending and figuring out how to put some money aside each month... just in case.
Remember, just like you're starting a new year, you can start a new way of managing your money - if you need to. If you're doing fine and feel you have good to very good financial health, keep doing what you're doing and make 2019 even better than last year!
*You can always use the myFICO Budget Calculator to help you see how much you're spending each month. You can also visit myFICO forums to see how others have analyzed their financial status and improved it over time. *
Rob Kaufman
Rob is a writer... of blogs, books and business. His financial investment experience combined with a long background in marketing credit protection services provides a source of information that helps fill the gaps on one's journey toward financial well-being. His goal is simple: The more people he can help, the better.
Subtract your liabilities from your assets. If your assets are larger than your liabilities, you have a “positive” net worth. If your liabilities are larger than your assets, you have a “negative” net worth. You'll want to update your “net worth statement” every year to keep track of how you are doing.
Net worth is a tool that is used to determine the financial health of an individual. It shows how much money an individual would have after selling all assets and paying all liabilities. It is possible to have a positive or negative net worth.
The state and stability of an individual's personal finances and financial affairs are called their financial health. Typical signs of strong financial health include a steady flow of income, rare changes in expenses, strong returns on investments, and a cash balance that is growing.
The income statement, balance sheet, and statement of cash flows are required financial statements. These three statements are informative tools that traders can use to analyze a company's financial strength and provide a quick picture of a company's financial health and underlying value.
Financial Status means the condition including finance, business, assets, properties, and operations of a person. Seen in 1 SEC filing. Financial Status means the measure of profitability, loss, revenue, income, earnings, debt, EBITDA, or cash flow.
You need to be really honest. There's no point hiding some things – it's best to get it all over in one conversation. Hiding your debts can have wider implications. It might not just be affecting you - for example, it could also your partner's credit rating.
Financial Status means the condition (financial or otherwise), business, assets, properties or operations of the Person in question. Financial Status means profits, losses, revenue, income, earnings, indebtedness, EBITDA, corporate valuation, available cash, or cash flow.
Financial statements used in evaluating overall financial performance include the balance sheet, the income statement, and the statement of cash flows. Financial performance indicators are quantifiable metrics used to measure how well a company is doing.
Make sure you describe your parents' occupation, any savings (like a 529 College Savings Account), and any student jobs. You might also discuss any sudden changes in fortune (e.g. parent fell ill or lost their job) that have ruined your original financial plans.
A company in good financial health will pay its bills on time and maintain good business credit. Analysis of financial performance metrics can be used to identify internal investment opportunities, like automating repetitive processes to increase productivity, and can help maintain positive cash flow.
Ans. An excellent example of a financial decision is when a firm selects a funding method. This selection takes place after the firm assesses its financial status and sources. So, this firm may decide whether to issue equity shares or debentures based on its assessment.
Your net worth provides a quick snapshot of your financial health by looking at the total value of all your assets (what you own) minus your liabilities (what you owe).
The most basic evaluation is to look at the financials of the company. This includes looking at the income statement, balance sheet, and cash flow statement. Other factors that can be evaluated include the company's industry, competition, and future prospects.
Assessing your financial health is important to ensure that you are on the pathway to attaining your financial goals. Evaluating debt, creating a budget, preserving emergency investments, checking your credit score, and reviewing estate plans all help in minimizing long-term difficulties.
Introduction: My name is Twana Towne Ret, I am a famous, talented, joyous, perfect, powerful, inquisitive, lovely person who loves writing and wants to share my knowledge and understanding with you.
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