It’s time to analyze your finances? Start with your net wealth, or where you stand financially. To do this, make two columns with your assets on one side and your liabilities on the other.


Assets consist of anything with economic value, especially those that can be converted into cash such as real estate (total value of your house), balances in your savings account and money market, the value of all investments combined (stocks, bonds, mutual funds, etc. ), 401 (k) and IRA accounts, and any ownership in business, if applicable.


Obligations are debt, such as your extraordinary mortgage payments, total maturity on all credit cards and loans (car loans, school loans, etc.), total amount of maturity for property settlements, utility payments, and the amount owed for allowances or Children support.

Clean concern

After your column is created, the next step is to reduce your obligations from your assets. If the end result is a negative number, take action and implement the budget to pay off all non-mortgage debt. Consider paying for goods in cash instead of using a credit card, try to set aside money every month in a savings account and build emergency funds.


To build wealth, consider setting aside money, you set aside every month to: (1) Certificate of deposit (CD) that offers a higher level of traditional savings account but binds your money for a certain period of time, (2) money market. Accounts that produce a return rate that is similar to a CD with the ability to withdraw funds when needed, or (3) 529 education savings plans that offer savings plans suspended flexible taxes to cover education costs.

Also, consider saving through retirement options: (1) individual retirement accounts (IRA) where you can contribute between $ 4,000 to $ 5,000 per year depending on age and reducing your contribution from SPT, or (2) 401 (k) plan Retirement offered by many employers as a way to encourage employees to save retirement. In the plan 401 (k), the company will often match a certain percentage of employee contributions.

The financial area forgotten by many people to consider is life insurance. According to the Insurance Information Institute, millions of Americans do not bring life insurance and, if they bring life insurance, millions do not have enough to provide adequate financial security for their families. The following are options for consideration: (1) All life insurance where coverage takes place for life and usually offers a cash value that might accumulate suspended life insurance, (2) where coverage lasts a long time and can be more affordable during life insurance, and (3) Annuity where insurance companies provide guaranteed payments at certain times taken from the funds you value with insurance companies.