How to Take Stock of Your Personal Finances

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It is important taking stock of your finances every Year. To do this you need to review your spending, insurance coverage and bank statement.
Other things involve savings, investments and taxes. Invest in accounting software to estimate income and expenditure. Here are some ideas on how to take stock of your finances
How to Estimate your Personal Finances
1. Review your Insurance Coverage
The best time to review your insurance coverage is January/February. The insurance companies offer open enrollment health plans.
Insurance premiums to consider are health, property, auto and life insurance. Make sure the amount reasonably covers your expectation and expenses. The insurance premium you take should account for total coverage.
You may also need additional coverage. This is because people experience constant change in their lifestyle, finances and expectations. Accommodating those changes is only logical and prudent.
You need to protect your assets and pay the premium to forestall unexpected financial challenges. Review your policies and update appropriately.
  • Review insurance coverage in January
  • The amount should cover expectation
  • Get total coverage
  • Get additional coverage
  • Review and update appropriately
2. Review Spending
We tend to spend more than we make on certain frivolities. Review your spending and track your expenditure.
There are many accounting software that offer easy financial tracking. The whole purpose is to get a holistic view of expenditure.
Look for patterns in your expenditure and study your bank statement. You can request a one year statement from your bank. You might discover how much you spent on groceries, entertainment, school fees or leisure activities.
Pin pointing where your money is going would offer better understanding of your spending habits. The next step is to prioritize your expenditure according to importance. Identify the problematic areas and reduces spending on frivolities.
3. Estimate Taxes
You need to understand your tax requirements. Estimate terms of taxes, debits, deductions to gain a view of tax requirements.
There are many things you might have done that increased your taxes. Think of things to do to reduce them. Find ways to spread the deductions for proper accountability.
You can consult a tax expert to help with your taxes. The professional would offer solutions and invaluable advice. You can also get professional help to evaluate your finances.
4. Savings and Investment
You need a savings and investment goal. Find out how to utilize your savings to reach a goal. You could also perform a retirement needs assessment and estimate the cost implications.
Prioritize your purchases and learn how to better utilize your savings. Don’t forget to review current investments, and evaluate your tolerance to risk.


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