Here’s How You Can Measure Your Financial Progress!
The way of evaluating financial progress may not be the same for all people. Those who have a colossal sum in their bank accounts like to think they are happy. At the same time, people who don’t worry much about money and are content with whatever they’ve got in their life are happy, too. The definition of being happy varies from one individual to the other. Similarly, different people look at financial progress differently. With that being said, it becomes necessary to measure how you have been doing financially to date. No clue how to do it properly? Well, here we have a few ways to do that. Read on to find out!
There are a number of people who rate their financial progress by the amount of money they rake in at the end of the month. If they are able to accentuate their earnings by a margin, they have a feeling that they have achieved a lot financially. Many tend to compare their salary figures with their peers and seem to swell with pride if they are a level up. This doesn’t imply that you are entitled to a raise every single year. You can work out additional streams from where you can rake in money in your account. It can be any kind of dividend investments, a side business, royalties, and websites. This will help you in a big way if you are aiming to fulfill your financial requirements. You just need to be calm and enterprising. Things will eventually work in your favor.
Track the growth of your net worth. That’s indeed an effective way to evaluate your financial progress. How do you calculate your net worth, you ask? It’s simple. After you have deducted your liabilities, the total value of the assets you possess represents your net worth. You might have a few financial goals to attain in life and may have applied some benchmarks as well. As you attain your first objective, look back and find out whether you could have done it in a much better way. Take the necessary actions when you set out to achieve your next goal. Try to keep the liabilities down as much as possible since that would help you increase your assets and your net worth as a whole.
If you are drowning in debts, you can keep track of your financial progress by measuring debt reduction. Being sucked into the quagmire of debts can put you into a disadvantageous position financially. It could also discourage you to such an extent that you would lose all hope of a resurrection. So, start paying off your debt slowly as doing so can help you move forward. Choose a method that suits you best and aim for debt reduction. When you start paying off your debt and continue doing that steadily, you will have a feeling of achieving something. Aside from a great level of satisfaction, this will give you the confidence of accomplishing bigger goals and you will get to measure your financial progress.
This one is an old way to evaluate where you stand as compared to your neighbors and relatives, or in that case, people whom you know. This is still considered to be effective, but in reality, it’s not. Sometimes, it won’t harm you if you compare your financial position with others. You would get an idea of what you haven’t done and what you need to do. However, if you keep doing that constantly, you are bound to ruin yourself. Never base your calculation of what someone has achieved without having proper knowledge of their bank account statement. There are certain financial limitations which you need to understand. Competing with a person who is in a better financial position than you are is utter foolishness and nothing else. Plan out things based on how much capable you are.
Take some time out, sit down, and think what financial progress means to you. Chalk out all your financial properties and work on them one by one. Once you get to know what financial progress stands for according to you, set some objectives for yourself to estimate how much you have succeeded. It’s as simple as that.
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