We introduce you to the first stage of your financial journey that will help you to accurately identify the value of your assets. Your financial path can be viewed as a journey. There is no point in being well-equipped and having a compass if you do not know where you begin your walk.
The diagnostic phase is probably the most important phase of the path. You need to know clearly the starting point so that you can then chart a route toward your goals. To help you, we propose that you focus today on the identification of your financial assets.
The financial wealth of a family is the difference between their assets (what puts money in their pockets) and their debts (what takes money out of their pockets). It seems to be a simple task but the fact is that many people do not know how many debts they have …
Unfortunately, for most people, this task is quite fast. Just look at the balances of your bank accounts and identify the value of the various financial products you have. The value of your real estate must also be considered, and you must record an estimate of the market value (the value at which you could sell the property).
Balances should be checked on a regular basis (for example on a monthly basis) and especially important if we are talking about your savings / investment portfolio, which will be addressed in the mini-course of investments (to be published soon).
Once you know the value of your assets, you should look at the value of your debts . Never forget that assets and debts are usually associated, so a careful analysis should always take into account the difference between the two (called net financial assets).
Its debts should be classified taking into account the following characteristics:
Of course, if we are talking about a family, you should consider both the value of your indebtedness and that of your husband / wife.
In Portugal it is possible to quickly identify your credit using the map of credit responsibilities of the Bank of Portugal. To access your map, simply enter the NBB Bank website with your access credentials (taxpayer number and password to access the finance portal). Please note that if you are married you should review your map together with your spouse’s.
The credit responsibilities map gives us the clear view of our indebtedness being one of the central documents of our free financial checkup. Once you have removed your map, you can email us so we can help you diagnose your financial health.
Once you have done this survey, try to assess your assets in order to know the value of your assets. In reality, having a credit for home purchase also has a housing as an asset. So your financial picture is improved (which has a positive impact on your motivation).
An idea that should be made clear from the beginning. Debt is not a bad thing to start with. What makes something good or bad is the use we make of that good or service. We can use credit responsibly and get very good results:
By the negative, however, the use of credit for the purchase of something beyond our means or for the purchase of goods that are not essential to our lives can bring some discomfort:
Having made a rigorous diagnosis of your family’s indebtedness you are in a position to look for ways to reduce your financial costs. Some of our prescriptions in this context consist of:
Try to do until tomorrow an association between all the credits you have and the respective interest rate of each of them.