Analyze your financial health
1.Know your current financial position: This is an important step to analyze your financial health. Know your financial position. You must be aware that financially where you are. A majority of people do not know that they have any assets. Most of them think that only real estate or house property is considered as assets. But your bank investments, fixed deposits, Provident fund and even your savings account etc. are your assets. So in this first step you verify and realize your assets. Then you check your liabilities. Your loans, credit card bill and any other outstanding bills are your liabilities. Find out all of them. What you have and what you owe to pay off. Realize this and know what your financial position is? Now you can go ahead.
2.Know your income and expenditure: This is another important step you have to complete to analyze your financial health. It is not an easy thing to know all your expenses. But your income is counted and it may be from salary, interest, rent or form any business etc. But for your expenses you should do some homework. Note down all your expenses. If you could not remember, take your own time and note down your expenses daily in a note book with details of items and amount. For example, groceries, vegetables, fruit, medicine, tea, sugar, stationary, entertainment, conveyance, tuition fee of your children, petrol, newspaper etc. etc with amounts. When you list out all, you can realize and sometimes you may wonder what your expenses are. When you get awareof all these items, you can stop or cut down unnecessary expenses.
3.Know your savings: After knowing all your expenses you can easily find out your savings, the left over income of a month. Simply reduce your expenses from your income to get your monthly savings. If your monthly savings is very less check what expenses you can reduce or avoid. Do so and keep a few bucks more as balance. If you can increase your income, do so and reach out your actual monthly savings.
4.Know your bank accounts: Here you have to analyze all your bank accounts. You may have more than one bank account and each account may have some money as bank balance. Check them and found the balances left in each bank account. Check the cash inflow and outflow of your bank accounts. How the amount is credited and how it is debited and for what. Close all non operating accounts which may have some amounts are held up. Transfer these to your main bank accounts. Now you are in a position to know what you have and where you are. Then proceed to the next step.
5.Know your financial goals: Here you have to assign your financial goals. You must know what you want. Where you have to reach. If you do not have a goal you cannot reach it out. You decide what do you want and when do you want and how much you have to spend for the same. For example buy a residential house after 5 years with 25, 00,000. Higher education of eldest son after 2 years with 500,000. Retirement at the age of 55 years and with monthly post retirement income of 1, 00,000 etc.
6.Know how to reach the financial goals: Last but not least you must decide how you can attain these financial goals. Here you must adjust your investment portfolio according to your financial goals. First check the time period you have to attain each financial goal. Then you invest in different methods of investments accordingly. If you have long time to reach a financial goal, take high risk and low risk combination and if you do not have much time go for safest investments.
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Now you are completely aware of your financial health and whereabouts. Go ahead with confidence; you can reach out all of them with high satisfaction. But keep in mind you must start it today itself. Do not put off for tomorrow. Start as much as early to get maximum benefit.