Understanding your financial status is the very core to your financial success. There are a lot of ways to know your financial status but I have derived 3 effective ways to consider to attain financial success.
1. Know your Assets And Debts
Whenever I seat in front of my clients. My first question is how is your asset versus your debt. I always start by saying that your assets should be higher than your debts otherwise, you are in trouble. Your assets define by how much money whether it is a liquidated or unliquidated asset you have on your account. For your planning, your assets could be, house, real estates, car, vehicles, insurance policies with cash values on it, jewelry are few of the assets you can consider. Debts, however, is the amount of money you awe from the banks or lenders.
Now, if you do n’t have money to pay for your expenses do not borrow money from the bank. If you have money to pay for the apparels, do n’t swipe your credit cards. The first measure you can do to increase your financial stability is to get out of debt.
2. Know your Income And Expenditure
The easy way to get a higher income is to get a good and decent high paying job. Whether money that works for you or money that somebody is working for your will measure your income that goes into your bank account.
When I went out of college, the goal is to land a high paying job that would give us a higher income in our pocket. The income you generated could be derived from your personal salaried income or the income that is generated from your business.
Your expenses, however, are the items that you incur in order to finance your operations.
The correct formula to savings and investment when it comes to expenses is:
Income – Savings = Expenses
3. Know your Financial Plan
The key to a better financial planning is the proper allocation of your income versus your incurred expenses. Now that you have allocated each asset you have now the option to chose the right tool to help you with your financial planning.
Grow your income while you are sleeping. Use different tools available in the market to keep it growing. When I started investing, I use BPI Trade platform in investing the money. The COL Financial is another platform that you can use. This is if you have proper knowledge about playing around with stocks in the market.
If you don’t have the proper knowledge you can use some other tool such as VUL type of investment and insurance infused into one product. In this product, you don’t need to worry about how your money would grow, as long as you choose your preferred risk appetite on your fund allocation.
I have another tip in order for you to get off the guilt feeling when you feel like you are drowning out of your financial planning. This may not be true to all but because I have experienced it myself I would like to share it with you. The first step that I do in gaining my good financial planning is to separate the portion of my income and giving back into tithing. When I started this formula I never regret the lose on my investments and income. The mindset is there is somebody above providing for everything that I have, by doing this mindset you have a higher view on handling money daily.
Income – Investments(Tithes) = Expenses
Understanding your financial status today implies that you acknowledge that there’s something wrong or right on your financial preparation. Knowing those 3 things is one thing, but applying those things is another thing. We have to do something here!
There is a commonality of this behavior to the idea of managing your physical body. When you doctor addresses your weight as the source of your obesity, he advises you to get well and do exercises every day. It is the same way with your finances. When your expenses do not equate to your income, you must do something to stop your excessive spending. In this way, you will make it right!
Literacy in the Philippines
In the Philippines where economic stability is a challenge only 25 percent of the adults are aware of basic money management according to Gallup. These 25 percent of adults might be the people who are people working to provide for their basic needs and their family’s needs as well.
Understanding your financial status in different sectors of the industry is highly encouraged as the rapid increase of illiterate Filipinos are growing so fast. Take for example the increasing demands of OFW who are working all their lives only to know that when they are back in the country they have limited savings and investments.
Life insurance, simply put, gives you peace of mind.
Life Insurance is designed specifically to take care of the financial burdens that occur on the death of yourself or a loved one. It pays a death benefit (also called “Face Amount”) to your beneficiary at your death. This death benefit can be used for many things, including funeral expenses, mortgage debt or other final expenses. The beauty with life insurance is that you can tailor the coverage to your needs. continue reading…
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