How often do you review your financial standing? It is good to scrutinize your personal financial figures at least once a year. Ask yourself these relevant questions. If your answers are mostly affirmative, rejoice, and keep up the good work. If you are getting nowhere and you are unable to break your bad habits to improve your net worth, you can always start now. It is not too late.
1. Paying yourself first: Are you putting aside an amount monthly from your income? The habit of paying yourself first will pay off handsomely in the long run because of compound interest. When you have accumulated a substantial amount you can invest and make more money.
2. Reducing your debts: Are you paying off your debts consistently to reduce the outstanding amount? A smaller amount will attract fewer interest charges and faster for you to clear your debt. It is a wonderful feeling to be debt-free.
3. Growth in your Investment: Do you see an improvement in your investment? Does it appreciate in value? Have you increased the size of your investment? In other words, is your wealth growing?
4. Net worth: Is your net worth improving? It means your assets are growing and your liabilities such as your outstanding loans are shrinking.
5. Earning power: Are you making more and taking home more money than before? The ability to get a pay rise or earn more is a positive sign of success.
6. Living within your means: Are you able to live within your means? Are you able to discipline yourself and avoid getting more material things? Avoiding spending unnecessarily is the way to stay out of debt and live within your budget.
7. Giving: Are you donating and giving to charity? The amount is immaterial; it’s kindness and compassion that count.
8. Insurance: Are you reviewing your policies regularly? Is the sum insured adequately? Doe the coverage meets your requirements? A life policy will be able to replace your earning power in case of an accident or critical illness. A house owner policy and a householder policy provide comprehensive coverage against unforeseen perils and compensate you for your losses.
9. Kick your bad habits: Have you stopped smoking? Do you still have the urge to go for it one more time and bet for it? Are you able to moderate your drinking habit? Are you watching less TV and spending more time outdoors exercising? You will be able to save a tidy sum to replace your bad habits with good ones.
10. Learn: When is the last time you read a book about personal finance? Be wise, read, and learn more to be knowledgeable about money matters.
"Financial peace isn't the acquisition of stuff. It's learning to live on less than you make, so you can give money back and have money to invest. You can't win until you do this." - Dave Ramsey
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