Measuring financial growth is an essential practice that helps you understand how well your money is working for you.
It involves tracking various aspects of your finances to get a clear picture of your financial health and progress.
This process is crucial not only for achieving short-term financial goals, like saving for a vacation or buying a new car, but also for long-term objectives such as buying a house, funding your children’s education, or ensuring a comfortable retirement.
Here are some simple steps to help you measure your financial growth:
1. Track Your Income
Start by writing down all the money you earn. This includes your salary, bonuses, and any other sources of income. Make a list of your total income each month.
2. Track Your Expenses
Next, write down all your expenses. This includes rent or mortgage, utilities, groceries, transportation, and entertainment. Make sure to include everything you spend money on each month.
3. Calculate Your Savings
To see how much you are saving, subtract your total expenses from your total income. If you have money left over, that’s your savings. Track this amount every month to see if it is growing.
4. Check Your Investments
If you have investments, such as stocks, bonds, or a retirement account, check how much they are worth. Compare their value now to what they were worth in the past. This will show you if your investments are growing.
5. Monitor Your Debts
Keep an eye on any debts you have, like credit card balances or loans. Make sure you are paying them off. Reducing your debt is also a sign of financial growth.
6. Set Financial Goals
Set clear financial goals, like saving for a vacation, buying a house, or paying off a loan. Track your progress towards these goals to see if you are moving forward financially.
Also read: How To Spot Fake Credit Alert
