Happy Friday, Everyone! Although it may seem cruel to send Step 3 of this mini-series on a Friday afternoon, there is a purpose as to why. If you are lucky enough to have the weekends off, it provides you with ample free time to complete this step. If you work over the weekend, there will be a few extra buffer days prior to the release of Step 4. Prepare the depressing side of your balance sheet (Part 2).
List all of your debts. List each individual credit card and include as much information as possible for each card. For example, list the total balance for the credit card, interest rate, minimum monthly payment and whether the payments are past due or current. List any student loans, car loans, mortgages, Home Equity Lines of Credit (HELOCs), personal loans, etc. with the same data points as those noted for the credit cards. This step is by far the most daunting to many of our clients for the simple reason that debt puts us all in a stranglehold. It can seem impossible to dig out of the mess that we've created, but doing nothing is a recipe that will compound the issue at hand.
Grab your list of assets that you've completed and calculate your debts. Now we can find your net worth. This is simply the total value of all your assets minus all your debts. Your net worth can be positive or negative (this tends to happen more with student loans, value of the home depreciating, or the fact that your just starting out as a young adult). Subscribe to our website or check back next week for Step 5. If you feel positive that these steps are leading you toward getting your budget in order, please take a moment to share this mini-series. Thank you!