Why It’s Important to Create a Financial Balance Sheet In 2019
If you are planning to get your finances in order in 2019, then one of the most essential things to do is understand where you stand with them.
One of the easiest ways to do this is by creating a balance sheet. That’s because a balance sheet will help you mend any cracks that you have with your finances.
According to Certified Financial Planner Jaime Eckels, you are advised to create a list that contains all your liabilities as well as assets.
After doing so, he then advises that one should title the assets and liabilities on the list, provided together with the account numbers, as well as the beneficiary designations, not to mention the interest rate charged.
You can then jot down as much information as you would prefer to do so on the list.
Additionally, whatever method you would like to employ is up to. If you would like to use a spreadsheet, a word file, or the classic pen and paper, you have the freedom to do so.
Purpose Of The Balance Sheet
The main objective of the balance sheet is to determine your net worth. That is, assets that you have after subtracting all the liabilities.
Once you get to this number, it can help you put your finances back in order and organized in one single place.
Indeed, it will also help you know where you truly stand in terms of the debts that you have in comparison to your assets. After this, you can be able to successfully determine your money goals in a realistic manner.
Additionally, it also has another morbid albeit practical value. In the event that you do not have a balance sheet and a certain situation affects you, it can be more difficult to manage your finances.
Doing such activity once every year is one of the most accurate gauges to improve your financial fitness.
Here is how one can effectively execute this:
Have Your Paperwork in Order
Assets are what you possess. This can include cash (such as CDs and money markets), investments, car value, home value, and personal property such as appliances, furniture, and tech.
On the other hand, liabilities are the things that you owe. For example student loan debt, personal loans, and credit card debts.
Indeed, if you happen to have all your financial information in order, then it can be a simple process to execute.
Which means that you’ll need to assemble important documents such as your debt repayment plans, your investment information, as well as your bank statements.
The objective, of course, is to have your assets increase steadily as your liabilities minimize over time.
By having this number down, and then making plans to increase or decrease the right column, you will be making positive steps to improve your financial standings.
Minimizing Liabilities
That being said, if you have further plans to minimize liabilities in 2019, here are some of the ideal ways in which you can do this:
You can start by clearing your student loan debt while you are investing and saving. Secondly, you can look to pay off your debt while accessing the stack method. Moreover, you can further access an effective pay-down plan when it comes to your debt.
Additionally, you can invest in your personal finances at least 15 minutes every day.
Increasing Assets
On the other hand, if you have plans in 2019 to increase your assets, then here are some of the most effective strategies to begin working on:
You can begin by tapping into dividend investing. Moreover, it’s wise to do some research and figure out comprehensive money-saving tactics.
Once you are able to effectively analyze the liabilities and assets that you possess, you can come up with an effective plan to tackle the situation without affecting your financial structure.
Moreover, you can further put in place a calendar reminder of which you can analyze your finances once a month, or even once a year. The key is to do it as many times as is necessary to ensure that you have a great setup in place when it comes to managing your finances and ensuring that they balance out the right way after ever financial year.
More in Legal Advice
-
`
Housing Market Going Up? Then Why Not Rent?
“Buy a house! It is the best investment!” How many times have you heard that? Probably enough to make a drinking...
October 29, 2023 -
`
Surprising! Celebs Who You Didn’t Know Had a Master’s Degree
When it comes to celebrities, we often associate them with glitz, glamour, and blockbuster movies. But did you know that some...
October 17, 2023 -
`
Navigating the Housing Maze: The 7% Mortgage Rate Quandary
If there is one thing that this year has thrown our way (apart from those fascinating tech gadgets we did not know...
October 12, 2023 -
`
Where to Buy a House in the U.S With a $100K Salary
Got a cool $100,000 annual paycheck in your pocket? Cheers to that accomplishment! With such a financial cushion, dreams of homeownership...
October 6, 2023 -
`
The “Grave” Housing Crisis Forcing U.S. Homeowners to Sell Their Houses
Every culture has its dreams and aspirations. For those living in the United States, it has traditionally been an idyllic house, spacious and...
October 1, 2023 -
`
Why Private Equity is Betting Big on Hollywood
Hollywood has long been a glamorous yet unpredictable industry. But what is new in Tinseltown? Private equity investments. Yes, that is right!...
September 19, 2023 -
`
Paying Off Your Debt Via a Home Equity Loan
Paying off debt can be challenging, especially if you have multiple loans with high interest rates. One solution that some homeowners...
September 15, 2023 -
`
The Possibility of a 1970s-Like Inflation Boom Happening Again
Inflation refers to the rate at which the general level of prices for goods and services increases over a certain period....
September 10, 2023 -
`
Want ‘Maximum’ Tax Refunds? Here Are Some Tips for You
With the tax season upon us, it is time to start thinking about how we can maximize our tax refunds. In...
August 30, 2023
You must be logged in to post a comment Login