Here are 10 financial questions to ask yourself:
- How much money do you need to live every month? (This should be enough to cover all your fixed expenses (rent, utilities, phone bill, etc.), plus groceries, gas, and others things you’ll need, even though the amounts fluctuate from month to month. You probably want to give yourself some cushion, as it may not be to reasonable to assume you wouldn’t go out to eat or buy anything at all, even if you lost your job.)
- Do you have an emergency fund, and if so, how much money is in it?
- If you lost your job tomorrow, how many months of living expenses would your emergency fund cover? (Total amount in your emergency fund from #2 divided by your monthly living expenses in #1 = the number of months your emergency fund could cover before it drops to $0)
- Do you have a 401(k) with your current employer and how much do you contribute?
- Is that contribution enough to get your employer match?
- Do you have any debt?
- If so, do you know how much debt you have and the interest rate on each loan?
- What is your net worth? (Assets – Liabilities = Net Worth)
- When it comes to money, what stresses you out the most?
- When it comes to spending and saving, what do you truly enjoy spending money on and what are you saving for?
Now, you may not have answers to all of these questions. That is okay. Taking the time to think through them and find the answers should help you gain a better handle on your finances and recognize your pain points so you know what to focus on. I recommend doing one thing at a time, so tackling your finances doesn’t become overwhelming.
Note: If you feel like sharing send me an email or a message, especially to question #9, so I can focus future posts on helping to minimize those things that stress you out the most.