Now that 2022 is about to end, it’s a good time to take inventory of your finances. Specifically, the balance sheet and statements of your circle of relatives.
At the beginning of the year, I urge others to take stock of the circle of relatives. A family circle balance sheet is nothing more than a list of assets and liabilities. Assets minus liabilities equal net worth. By tracking your net worth, you have a clever concept of your situation.
Unfortunately, for many of us, adding to me, we will find that due to the fall of the inventory market, our net worth has decreased recently. It would be great if our net worth never decreased and only increased; unfortunately, this is not the reality. Keep in mind that a net worth tells you where you are at a specific time so you can compare it over time.
Even with the recent stock market recession, many investors will realize they are in much better shape than they were five years ago. Ultimately, a family circle check is vital to see how you’ve fared over time, so I propose to spend time and fill one out.
There is no doubt that over the last year or so, our burden of life has increased. We all see it at gas stations and grocery stores; Senior positions have become a reality. Understanding your life charge is imperative in any exercise of making monetary plans. So, it’s a wonderful time of year to look back on the past six months and what you spent your money on. In fact, you deserve to be able to account for almost any and all dollars brought into the family.
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Ultimately, you need to know how much it costs you to live so you can compare it to your previous numbers to determine what the increase in your life charge is. If your life charge is arising at a higher rate than expected, you will be notified in a timely manner and will be able to adjust your expenses and the problem.
As far as I’m concerned, it doesn’t matter what the inflation rate is in the country or the inflation rate in Michigan. What is vital is its own inflation rate. Yes, the value of used cars has increased particularly recently and this is in fact one of the reasons why the inflation rate in the country has increased. However, if you don’t buy a car, this kind of inflation doesn’t. We all spend our cash differently, and as a result, we each have our own rate of inflation. I recognize that it is tedious to keep track of expenses; however, it becomes less difficult with generation. We could also let the generation paint for us and make our lives a little less difficult.
We live in an ever-changing world and it is vital that we stay on top of our financial affairs. Completing a circle of family balance and currency flow will allow you to stay in touch with your finances and make better decisions with your currencies. I believe that the longer you stay in touch with your finances, the more coins will remain in your pocket; and I think coins look better in your pocket than anywhere else.
Good luck.
Rick Bloom is a paid money advisor. It’s www. bloomadvisors. com. If you need me to answer your questions, please email rick@bloomadvisors. com.