How to Create a Financial Snapshot

A Financial Snapshot is just a fancy way of saying a summary of your current financial picture. As I’ve been mentioning often in my emails lately, the reality is that we tend to go on autopilot with our money and just make assumptions that things are fine. But the truth is, we can’t just always assume that. We gotta know for a fact where we stand.

That’s why you need to spend a little time digging deep into your finances at least once a year so you know what your financial picture looks like – no guessing!

Why the Snapshot is important:

• It allows you to take the guesswork out of how healthy you are financially and allows you to make better, more educated decisions.
• It shows you where you may need to focus your financial goals and any necessary changes that need to be made.
• We make better decisions when we have accurate information.

Here’s what to include in your Snapshot:

Income Streams:

• How much you are paid.
• How often you are paid.
• How variable it may be.

Repeat this for all of your income streams.

Assets:

• • Liquid assets (cash savings, sinking funds, and checking accounts).
  • Retirement accounts, their current balances, and how much you regularly contribute.
  • Brokerage accounts, their current balances, and how much you regularly contribute.
  • The current value of your home, boat, car, and any other assets you may have.

Debts:

List all of your debts (including the mortgage).

Include:

• • Total balance due
  • Due date
  • Minimum payment
  • Interest rate
  • Any promotional period end dates

Expenses:

List out all of your expenses that are:

• Monthly
• Quarterly
• Semi-Annual
• Annual

If you are not in tune with your spending, start by looking at the last 30 days’ bank statements from the accounts you spend money from regularly. Highlight like expenses in the same color (for example: highlight all grocery-related expenses in pink; highlight all fuel in green; highlight all Amazon in blue, etc.).

I know it’s a lot of work but…

Okay, I know that’s a lot! But I believe this is so important to take the time to do. I mean, how many times have you forgotten that your Amazon Prime Membership yearly due was due this month? Or any other number of things that are honestly silly to forget? It happens to all of us, so we have to be proactive and smart in managing our money. We must spend some time with our finances to get to know them. I mean, if you’re trying to build a relationship with someone else, don’t you do that by spending some time with them? Of course! You must invest time in getting to know your overall financial picture.

Depending on how you like to work best, I recommend using a software program like Personal Capital (which I personally use – there’s a free and paid version) and linking up all of your accounts to one place to make it easier! Or write it all down in a notebook! Seriously, there’s nothing wrong with using pen and paper! 

P.S. The bank that we use for our Emergency Fund raised their APY again! It’s now 3.00%! That’s more money just for keeping your money with them! Head here to check them out. The minimum opening deposit is $100, so if you haven’t yet started your Starter Emergency Fund but have the $100, set up an account and start earning more for your money!

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