Financial success will not happen by chance. You cannot achieve financial success without a strategy. If what you are doing today is not working, it’s time for a change. It is time to get unstuck and take complete control over your financial health. What is your Personal Finance Strategy? You need a personal finance strategy that explains the challenges you are faced with; a written policy that outlines how you will deal with your challenges; and action plans that layout what actions you will need take to carry out your written policy.
Let’s start with a diagnosis. Find your net worth and then determine your net income. Your net worth is determined by subtracting your total liabilities from your total assets. If your net worth is a positive number that’s great but if your net worth is a negative number, you need to review all your liabilities to see how you can decrease your liabilities. Net income is determined by subtracting your total monthly expenses from your total monthly income. If your net income is a positive number that is really great, but if your net income is a negative number, you need to decrease your expenses. These are only two indicators that will give you a snap shot picture of where you are financially at a point in time. After you have reviewed your results, you will need to decide how you will correct your financial situation and develop an operating policy. Your policy should be a written policy on the changes you will make and how you will proceed so that these changes will give you the results you desire. Finally, you will need to prepare written action plans on how you are going to implement the changes needed to resolve your financial situation. This will become your new personal finance strategy.