Assessing Your Current Financial Situation

Updated: April 2024

Written by: Jessica 

Before getting started on your financial goals, it’s important to understand what your current financial situation is. Complete an assessment of your current income, expenses, and your assets. 

• Net worth: Here is a sample financial statement found off the internet for assessing your net worth. This includes savings accounts, brokerage accounts, equity in houses, cars, insurance policies, as well as retirement accounts. 

• Cash flow: Here is a sample spreadsheet to understand your monthly cashflow based on your income and expenses. Feel free to make a copy and customize it to fit your situation. The goal is to make sure you have more income coming in than expenses going out. 

• Return on Investment: It is also very useful to understand what type of returns your current investments are making. As of April 2024, current savings accounts are returning about 5%. Using the rule of 72, divide 5 into 72, and you get 14.4. That means if the returns remain constant at 5%, it will take you 14.4 years to double your money. Keep in mind that this doesn’t account for inflation, which erodes the purchasing power of your current dollars. 

Once you understand your current net worth, cashflow, and what your current return on investments are, the next step is to create your financial goals.