Last updated on February 1st, 2021 at 08:32 am
With your finances, it is necessary to check how your funds are performing. The worst-case scenario is finding out your finances are out of control. To help prevent that, it is vital to evaluate your financial discipline and overall financial health. This is no different from brushing your teeth each day to help prevent cavities. Vehicles have their wheels rotated and oil changed so they can keep on running to help avoid future breakdowns. You get a physical at the doctor’s to check your overall health. It is critical to control your finances and make sure you stay on top of them and remain in charge.
You know how much you spend
To allocate your finances, you know how much you spend. Knowing that number helps you make educated decisions.
You have a steady source of income
Whether you have a full-time job, part-time gig, investment income or contracting work, you recognize how important it is to plan based on your steady income now and in the future.
You know and pay your bills
Knowing how much money you spend on recurring bills and expenses
Have your emergency fund ready
Each month you are ensuring you have enough saved in an emergency fund for a rainy day. You never know when you are going to need it. The fund has 3-6 months of savings.
You have a financial retirement plan and target
A retirement plan might be a pension, 401K, IRA or other future revenue streams such as a rental property. You know you will be ready to last through retirement and cover your expenses. Those calculations have also taken into account inflation and any appropriate taxes that might be due.
You take advantage of tax breaks
It is a fact of life that you will have to pay taxes. You can look at your finances and have determined ways to save, spend and invest your money to maximize your tax savings.
You stay on top of your credit
Maintaining a high credit score can help get future financing endeavors. Knowing your credit score and keeping it high is a great way to take charge on your finances.
You know your net worth
Knowing your net worth will allow you to make short term and long-term decisions. To learn more about increasing your net worth, read 6 things to do to increase your net worth.
To grow your finances you are not only saving in bank accounts but investing in things such as stocks, bonds, real estate, business ventures, etc.
You have no debt
You focused your savings towards paying off all of your debt and now focus your finances towards growing your wealth.
Have the correct insurance
Insurance is one of those things you hope you never need, but when you need it you are grateful to have it. Having insurance, you know it will cover you for life’s worst-case scenarios.
Have financial discipline
Looking to buy that latest phone or the fancy watch. You know with your strong financial discipline you can ask yourself do I need that or can I wait.
Above are financial disciplines you are following and know you are in control of your money. If you are not sure about one it is a great time to get started.