We won’t do a detailed financial assessment in this challenge, but just get some of the basics down. I’d like you to use your next two sessions to finish up your assessment in small chunks.
Your action step depending on which track you’re in:
- Debt reduction: Yesterday you should have at least started to make a list of your debts. Today Iâ€™d like you to finish the list â€” look extra hard in drawers for bills, look in your emails and online accounts, just to be sure youâ€™ve got a (fairly) complete list. Now start listing the amounts you owe overall, and what payments (if any) you have to make each month. You donâ€™t have to finish this today (getting all the amounts) â€” do some today and some tomorrow.
- Savings/investment: Yesterday you started a list of your debts, savings and investments â€¦ today Iâ€™d like you to start (or continue) listing the amounts for each debt, savings account, investment account, credit card. You can do this in a spreadsheet or a program like Mint.com or some other personal finance software.
Finally, your next action step depending on which track you’re in:
- Debt reduction: Today you should finish getting all the amounts for your list of debts â€” how much you owe overall for each debt, and how much youâ€™re supposed to pay each month. Now add up both amounts, so you can see how much you owe overall and how much you need to pay each month. Weâ€™re going to use this tomorrow to start making a debt reduction plan.
- Savings/investment: Today Iâ€™d like you to add up how much you pay toward debt each month, how much you put toward savings, how much goes to investments, and how much pays regular bills and other expenses. Also, add up all your assets (savings, checking, property like a car or house, investments) and then your debts (credit card balances, loans you owe, etc.) â€¦ and put the two numbers together for a quick and easy â€œnet worthâ€ number. Basically, subtract your debts from your assets. If all is well youâ€™re in the positive!
OK, after these two days, weâ€™re pretty much done with the assessment phase of our course. Soon weâ€™ll be diving into some general principles, along with action steps for improving your situation. I canâ€™t wait!