The news is by your side.

- Advertisement -


0 3

Get real time updates directly on you device, subscribe now.

When I took my first financial physical, I was on life support! Coming out of business school, I was
$60,000 in debt. Student loans, a business school emergency loan, and a loan from my employer
before I even started working amounted to a low salary and high debt. The results of my first financial
physical provided me with my first goal: to get out of debt and never owe anyone money again.
I started earlier than most do (in fact, most people never give themselves a financial physical).
However, I recommend doing one during your first year in college. This is really the basis for
everything you do in your personal financial life. You need to have a starting point every year.
The best time to do your financial physical is annually in December. Start with a budget recap of the
existing year. If you do monthly budgeting, this should be easy. Tally up your income and expenses for
the current year and then forecast your income and expenses for the following year (see the sample
budget that accompanies principle 13). At the same time, develop a net worth statement for the
existing year and forecast a statement for the following year (see the sample net worth statement you
saw in principle 12).
Doing these tasks will allow you to analyze your financial health. Are you sick or healthy? Do you
have a positive or negative net worth? Will you be spending more than you make next year? Which
assets will you use to fund your shortfalls?
Once you’ve ascertained your financial health, you then can develop strategies for managing it.
Where/how can you cut spending? Where do you invest your excess income? How do you develop an
emergency fund? Focus on this annual financial physical and keep coming back to it every month. It
will allow you to manage your personal budget effectively and to make thoughtful decisions about
your personal financial life.

Get real time updates directly on you device, subscribe now.

Leave A Reply

Your email address will not be published.

Subscribe to our newsletter
Sign up here to get the latest news delivered directly to your inbox.
You can unsubscribe at any time

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More