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How to get started with personal finance review

How to get started with personal finance review

Personal finance is one of the most important aspects of our lives, yet it is often one of the most neglected. We may not like to think about it, but our financial wellbeing is crucial to our overall health and happiness.

That's why it's so important to conduct a regular personal finance review. By taking a close look at your income, expenditure, debts and savings, you can get a better understanding of your financial situation and work out where you can make improvements.

A personal finance review doesn't have to be a daunting task. In fact, it can be quite straightforward if you follow these simple steps:

Gather your financial paperwork

The first step is to gather all of your financial paperwork in one place. This might include your bank statements, credit card statements, bills, mortgage documents, tax returns and any other documents relating to your finances.

Review your income and expenditure

Once you have all of your financial paperwork to hand, it's time to start reviewing your income and expenditure. Take a look at your bank statements and credit card statements to see where your money is coming from and where it's going.

If you're not sure where to start, you might want to use a budgeting tool like Mint or YNAB to help you track your spending. This can give you a good overview of your spending habits and help you to identify any areas where you could cut back.

Analyse your debts

If you have any debts, now is the time to take a closer look at them. Make a list of all of your debts, including the amount owed, the interest rate and the monthly repayment.

Then, you can start to work out a plan to pay off your debts. If you have multiple debts, you might want to consider using the debt snowball method to pay them off. This involves paying off your smallest debt first, then using the money you've freed up to make a bigger dent in your next debt.

Assess your savings

Next, it's time to take a look at your savings. If you don't have any savings, now is the perfect time to start building up an emergency fund. Aim to save enough money to cover three to six months of living expenses, so that you know you'll have a cushion to fall back on if you ever lose your job or face another financial emergency.

If you already have some savings, you might want to consider investing them. This could help you to grow your money more quickly and reach your financial goals sooner.

Set some financial goals

Finally, it's a good idea to set some financial goals. What do you want to achieve in the short-term and long-term? Do you want to pay off your debts, save for a deposit on a house, or retire early?

By setting some financial goals, you'll have something to work towards and you can start to put a plan in place to achieve them.

Conducting a personal finance review on a regular basis is a great way to keep on top of your finances and make sure you're on track to reach your financial goals. By following these simple steps, you can get a good understanding of your financial situation and work out where you can make improvements.

Posted on Jan 13, 2023, in Personal Finance

Any information contained within the contents of this blog are opinions and suggestions of the writers and do not necessarily reflect any policies or positions of the credit union. Any reference made to products or promotions are not guaranteed at any time. This information is not intended to be considered financial advice. It is provided for your education only. Community 1st Credit Union is Federally Insured by the NCUA.