Are you trendy? Do you keep up with all the hot trends or do you see some new trends that you definitely could do without? Maybe you are like me and it is a little bit of both. I like the trendy new shoes that emphasize comfort and function but are still nice enough for work. Nice! Maybe I’m just a grump but pajama pants in public, I could do without.
Have you noticed that trends have taken on front row spot in social media? Trends have always been important but now we constantly see headlines that hype what is trending on Twitter, You Tube, Facebook, Instagram, the various cable news stations and much more. What is trending is viewed as extremely important. So why is it important? Trends tell us where things are going and what we can expect next. Trends help us predict the future and plan ahead. Trends can help us decipher the world we live in. but trends are even more important in our personal finances than they are in fashion or sports or internet memes. So, how are your finances trending?
When I sit down with people and review their budgets, assets and liabilities, we are able to determine the state of their financial health. As a certified credit counselor, many of the people I meet have finances that are weighed down by debt or income issues. My job is to show them a path to get their finances trending upward. The direction of the trend is the most important thing. Even when debt levels are high and budgets are still tight, I can see real relief in the faces of my clients when they have a plan to deal with the issues. Even if you feel like you are on solid ground financially, you need to take stock of your situation. The best way to evaluate your financial trends is by measuring your net worth. You can find a simple to use net worth statement on our website in our Resources page, under the Financial resources tab.
Ask yourself these questions: Is your credit score rising higher or slipping lower? Are your debt levels headed for the roof or are they slowly coming down? Is your retirement growing or melting away? Are your assets growing or are they diminishing over time? Is your cash flow getting better or worse? These are important trends that will help you determine and evaluate your financial health. You should review your net worth at least once a year to get a clear picture of how your finances are trending. It can also help you to fix a problem with your finances that may have otherwise gone undetected. If you are gaining in net worth, you are trending in the right direction. If you are losing net worth, you need to review your budget and make the necessary changes so that you start to grow your net worth again. Net worth might be the most underutilized financial tool in your proverbial tool bag. You don’t have to be wealthy to have a net worth; you just want it to grow every year; you want to keep it trending upward. I encourage you to use the link above to evaluate your net worth right now. You should save your evaluation and then do it again in six to twelve months. A regular review will alert you to any potential problems in your budget and keep your money goals on track. Make net worth a regular part of your financial planning to see how your finances are trending. You’ll be glad you did!