Let’s face it, most people don’t start their bovine-eating journey with a $99.99/lb. Wagyu A5 strip. Most people don’t even know about Wagyu in the beginning; they know about those cuts of meat that might only succumb to the forceful sawing of their father’s serrated knife from a 20-year old (partial) set.
The same is true when it comes to people learning about money for the first time. I mean really taking an interest in mapping their current situation and creating a plan to get to the next level. Where do they start?
If you’re just getting started on taking control of your finances, consider the following steps to help you on your way.
1) Know Your Financial Goals
As with any meaningful endeavor, you need to know your ‘why’ before you need to know the ‘how’. Take some time to think about why your goals are important to you. Are you looking for financial stability so you can sleep better at night? Maybe you are interested in having more money to be able to give to charities close to your heart. Many people look to build wealth to give their families a better life than they had. Whatever it is for you, make it clear and based around the cornerstone of ‘why’.
Goals should be fluid as you progress through life. Saving for college or a down payment on a first home are typical goals of young adults. Retiring with dignity and resources to rest the way you want comes later in life. Endless scenarios lie in-between. Once they are met, set new goals to aspire toward with the confidence of accomplishment on your side.
2) Know Your Net Worth
Understanding where you are starting from is the first step to getting to where you want to be. Simply put, your net worth is equal to your total assets minus your total debts. There are tons of net worth calculators on the web to assist with this. Find one that works for you and get started.
Running your personal finances is a lot like running a business. Make sure that you track your progress month-to-month. It doesn’t matter if you do it with pen and paper or on a spreadsheet – but do it. Doing so will keep you informed and engaged!