Being able to analyze your finances at any time will help you to have and maintain a balance, not only financially, but personally. Analyzing your personal finances regularly is necessary, not only to know your current situation, but also to try to plan ahead and prevent. Any unexpected life event.
As our lives change, our personal finances evolve. It is not the same to analyze your personal finances when you are single, as when you live with a partner as a couple. How many people live in the home? How many people contribute to the total income? Where do you live? Do you plan to stay in the same place in the long term?
These are some of the questions that impact your personal finances both, now and in the future; they define the basis of your expenses, and more importantly, they help you define your future financial goals.
Define your net worth
In your personal financial analysis it is important that you include a list of your main possessions, if you have, at market value, and one of all your debts. This will help you define your net worth, that is no other thing than the difference between everything you own (home, car, cash, etc.) minus everything you owe (loans, unpaid taxes, debts, etc.).
You should also analyze and understand the relationship between your income and expenses. Your income is any form of money you receive: your salary, interest income, the lease of a property. Your expenses, on the other hand, are defined by your lifestyle, your consumption preferences and your family circumstances.
Know your expenses
Having a high income is not the same as being wealthy, even if your income level is high, if you spend more than you earn you are living in red. If you don’t have any savings, then you don’t have money to invest and grow. Knowing your net worth will help motivate you to better manage your money.Performing financial analysis regularly helps us identify patterns of behavior that are essential to define financial goals and make a realistic plan to reach them.
Glass gives you a hand by taking a photograph of your personal finances at any time you want, with information in real time. Not only can you compare your income and expenses graphically, but Glass also helps you visualize your expenses by category. Haven’t joined Glass yet? Get to know us and take control of your finances.