Four Important steps to take to understand your financial situation

Finances, Finances, Finances, this is not an exciting topic, but it is very necessary to understand your full financial situation.

If you are anything like me, you can find many, many other ways to occupy your time but it’s in your best interest to stop procrastinating and understand where you are financially!

When we are in our 50’s, many of us find ourselves at a crossroads in our lives. We may be approaching retirement, caring for aging parents, and dealing with the costs of educating our children. These are all HUGE milestones and can be quite costly. On the plus side, this is also a time when we are at our highest earning potential. This is why it’s crucial to take a comprehensive look at your finances NOW and make sure you are on track to meet your financial goals.

If you have a significant other, it’s important for both of you to understand your financial situation. Many times, one person in the relationship is the “money” person but at this stage it’s important for both individuals to be informed.

The following are four steps to take to begin to understand where you stand financially:

  1. What do you Own: It’s important to list out all your assets. This will include, bank accounts, retirement accounts, real estate, business interests, stocks and bonds, autos, etc. I will tell you from experience it can be a process to compile this list. If you are anything like me and my husband you have opened and closed accounts over the years and it can take some time to iron out the list but like anything else, take it one step at a time and allocate some time each week to get this accomplished. Before you know it, you will have your list!

  2. What do you Owe: This step may be a little easier to compile because the bill collector would likely be knocking on your door if you are not regularly making payments. This would include mortgages, auto loans, credit cards, lines of credit, business obligations, etc. Once again list these all out in one spot.

  3. Assess your monthly bills: It’s essential to understand the amount it costs to run your life or operating costs. These costs include utilities, groceries, insurance, housing, savings, transportation, medical/health, clothing, entertainment, pet expenses, etc. List out all categories that you spend money on on a monthly basis.

  4. Create a budget: Once you understand your monthly bills it’s important to develop a monthly/annual budget. This step will be the plan for your future. It’s never too late to start budgeting, and it’s especially important as retirement approaches. There are many budget templates on the internet, so find a favorite format and fill it out. If you are using software, such as Quicken, the software will help you develop a budget based on your prior spending habits.

Dealing with finances is not always a fun task but taking control of your finances is essential to ensure a secure and comfortable future/retirement. These are just the first steps to take in understanding your finances.

Assessing your financial situation is a process so be on the lookout for future blogs on this topic. The goal will be to get you through the process one step at a time.

Also, keep your eye out for the Isn’t She Amazing course “How to be a Woman Who Understands Her Financial Health”. We are planning on releasing this self-paced online course in June of 2023.

Action Step: Compile a list of What you Own.


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