Getting fit isn’t easy and the same can be said when it comes to getting your finances in order! It takes time and discipline. But, before you get ready to run a financial marathon, you need to evaluate your strengths and weaknesses, as well as take a look at your goals. What are some things you’re good at when it comes to your finances? What are some things you need to improve? It’s important to be honest with yourself while completing this exercise. The only way to improve yourself is to understand your weaknesses. Perhaps you have a budget but don’t always adhere to it. That’s okay! Take some time to look at what’s causing the problem and come up with a plan to fix it. No one can be good at everything and it’s important to understand where you’re weaknesses come from to better understand them.
Strengths and Weaknesses are one small pieces of the puzzle though. Once you have figured out what you do well and what areas you need to work on, you can look at your current situation. There are seven measures to help determine your financial stability.
Those are your:
- Current net worth
- Cash flow
- Debt-to-income ratio
- Liquidity ratio
- Savings ratio
- Credit score
Look at your current numbers. Are you happy with any of them? If not, where would you like them to be? Set yourself some goals. What numbers would you like to see and in how much time would you like to get there?
We’ve provided you with a couple of worksheets to help get you started!