When it comes to financial progress we are all at different places. In fact, some of us may not even measure progress in the same way. As you get to see that “rich” means different things to different people, the way you measure financial progress might vary from the way your neighbor measures it. Therefore, it is important to understand how you feel about your finances, and also be prepared to measure your progress in a way that works for you. Here are five suggestions were given by MoneyMindz.com, Free Financial and Investment Assistance Portal of how to do it:
An easy way to keep track of your financial progress is to track the way that your net worth grows. As net worth represents the total value of your assets after your liabilities have been subtracted out. It can be a good way to keep track of how close you are to reaching a financial goal since you can see results as you reduce liabilities and increase your assets.
Generally, some people measure their financial progress by how much money they make. So, if they can increase their income a little bit each year, they feel as though they are making good financial progress. It does not mean that you have to get a raise from your 9 to 5 job every year; rather, you can work to cultivate additional income streams (from a side business, dividend investments, a web site, or royalties) to help you meet your income goals.
For the people who are in a great deal of debt, financial progress can be measured by debt reduction. So, being in debt can be a rather discouraging thing, so being able to pay it down can be a big help. You can choose a method of debt reduction that works for you and also set to work. While paying down your debt especially when you pay off a loan, you will feel a sense of accomplishment and well being.
Size of Your Nest Egg
We get to see that some people are not as concerned with what is going on now as they are with what is likely to happen in the future. If someone is building toward a certain goal, the size of his retirement account can be a great indicator of where he is at financially. Once you set more money aside, and as your nest egg grows, you can measure your financial progress — and how close you are to your retirement goal.
So, all you can do is take a few minutes to think about what defines financial progress for you and sort out your financial priorities. Once you get a better idea of what financial progress means for you, you can begin to set solid goals to help you see the progress that helps you on the road to financial freedom.
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