State of the Home: Assessing Your Finances
Bankruptcy | January 4, 2016
Assessing your finances and learning more about where you stand can help you get a true understanding of your financial life and make the most of your income and assets. You can’t do anything to improve your situation unless you know what it truly is – and fear of the unknown is worse than finding out exactly where you stand. You’ll be able to make a true plan based on facts and eliminate some of the stress that comes from feeling out of touch and out of control when it comes to your money.
Take a look at your paycheck and make sure you know where all of your deductions are going. Understanding where this money goes is crucial and mistakes can be costly. If you don’t realize you are adding money to an FSA each month, you could lose those contributions at the end of the year, since these funds are designed to be used or surrendered annually.
What do you Owe?
Tally up all of your debts to get a true idea of your financial situation. You’ll need to know both the total amount due and the monthly payment. Include your mortgage if you have one, auto loans, credit cards, student loans and other personal debts.
Make a List of Creditors
In addition to your regular monthly debts, scope out any outstanding collections you owe – or that a creditor claims you owe. If you are getting calls from debt collectors, list each account here. These may seem overwhelming, but this information can help you later. If you decide that bankruptcy is the best way to get a fresh start, you’ll need to know all of your alleged debts.
Savings and Assets
Do you have an emergency fund for short term issues? Financial experts recommend having a fund of at least $1,000 on hand to cover unexpected issues like car repairs, appliance breakdowns and family emergencies. Having this cushion in place could ease any financial stress you feel when something unexpected happens.
Your long term savings and assets matter, too. Are you saving for retirement or contributing to a 401K or other program? Taking a look at these assets can not only make you feel better about your financial picture, it can help you identify any areas you need to address to improve your long-term financial outlook too.
Evaluate your Findings
Take a look at what you’ve collected and make sure that your payments don’t exceed your income – you’ll still need to cover food, utilities and other regular expenses each month. If your debts are eating up too much of your income each month, you’ll need to take action to keep more of the money you earn each month.
If you’ve found that your debts are taking up too much of your paycheck each month, one of our knowledgeable bankruptcy attorneys can help you learn more about your options. Bankruptcy can help you get a fresh start and begin making the most of your income – and protect your financial future, too.