Taking a Personal Financial Snapshot

A snapshot can help you see what’s going on in your life financially. While you may already be doing some daily tracking of your spending or are strict with your personal budget, it also help to look at the bigger picture. Doing this once a year can help you see the reality of where you are and help you create realistic financial goals.

So where do you begin?

Start by listing down the essential numbers. Grab a pen and a paper (or do it online if you are more comfortable with it). Write down your income with notes on how it has changed over the year. If you have performance bonuses or other considerable sources of money, include this in your cashflow list.

Break out your spending lists and do a quick summary of where your monthly expenses go – mortgage/rent, utility bills, installments you are paying for, cost for school and kids’ activities, usual grocery spending, insurance payments, property taxes and other revolving credit that you foresee will be part of your spending list for the next 12 months.

Know how much assets you have in the form of savings, retirement contribution, investments and the current value of any property you own.

Next, understand your net worth. This is basically, all you own minus all you owe. Doing your lists first would help you determine this easier. Make sure that the “what you owe” section isn’t just your mortgage but also includes credit card debt, unpaid student loans and even payday loans that you may have that have not yet been discharged.

Finally, draw up a plan for the next 12 months (remember, we suggest doing this at least once a year). Include an assessment of your strengths and weaknesses. List areas where you are doing well or where you want to improve on. For example, if you feel like you have excessive spending on non-essential items, put this under your weakness list.

Review your financial goals last year and ask yourself if you achieved it. Create a short paragraph to detail what you did to successfully achieve it. If you missed the goal, think of the reasons why you didn’t and what you need to do better to reach that goal.

Set realistic goals with a solid action plan for yourself (or for each member of the family if this is for the family’s financial snapshot) for achieving these goals.