How to get started if you want to change your financial life? First thing you have to do is make a decision that you are going to change your financial life.
Make a commitment with yourself that you will do ‘whatever it takes’ to reach your financial goals. This implies changes in the way you think and also changes in your habits.
Next you need to know where you are financially today. Make a personal financial statement. Know your numbers.
Personal financial statement
A personal financial statement is the basis to analyse and evaluate your personal financial story. Make a personal financial statement every month. Monitor the progress of your personal financial goals.
If you have more than one business, real estate, insurances, loans, state each one on a separate line in the financial statement. A more detailed financial statement will give you a better understanding of the numbers.
|Income category||Amount in currency|
|Earned income (salary)|
|Other income (vacation allowance)|
|Other income (bonus)|
|Passive income from business 1|
|Passive income from business 2|
|Passive income from real estate 1|
|Passive income from real estate 2|
|Royalties from intellectual property 1|
|Royalties from intellectual property 2|
|Interest earned from bonds|
|Total income [A]|
|Expense category||Amount in currency|
|Credit card payment|
|Home service costs|
|Sport school subscription|
|Total expenses [B]|
Total monthly income [A] -/- total monthly expenses [B] = monthly amount to save, invest and/or extra amount to pay out your debt.
|Asset category||Amount in currency|
|Paper asset bond|
|Real estate 1|
|Real estate 2|
|Intellectual property 1|
|Intellectual property 2|
|Liability category||Amount in currency|
|Other loan 1|
|Other loan 2|
Major financial goal
Next step is to understand the numbers as stated in your personal financial statement. Set one financial goal for a period of time (6 month or one year).
State your major financial goal:
“I want to save 30% of my monthly income (10% to my investment account for my future investments, 10% to my saving account and 10% for charities)”
“I want to decrease my debt with EUR …. every month, for the upcoming 6 month”
“I want to increase my passive income with EUR …. every month for the upcoming one year”
“I want to increase my passive income with EUR …. every month and I want to decrease my debt with EUR …. every month for upcoming year”
Focus on your major financial goal. Take action and do whatever it takes to achieve your major financial goal.
For your financial success!