Note: At Zen College Life, we like to look at how we can squeeze the most out of life. I firmly believe that not having to fret over finance frees you up to make the most of your time, and your life.
This is Part Two of the Take Control of Your Money! Series – a series of practical tips and step-by-step guides to take control of your personal finances and how to manage your savings so you can focus on getting the most out of life. Click here for Part 1.
If you’ve ever seen the movie Airplane!, you’ll remember the scene where the wife screams, “I gotta get outta here!” and the stewardess comes up to her, shakes and slaps her and yells “Get a hold of yourself!” The stewardess is soon relieved by a male passenger, who in turn in relieved by Dr. Rumack, who gives way to a nun, and soon enough the rest of the passengers are lining up for their turn. If you’ve never seen the scene, I want you to stop reading this post right now and go watch the movie. You can thank me later.
As for those of you who know what I’m talking about, here’s my virtual shaking, slapping, and screaming at you: “Get a hold of yourself!” This is Step One of our series, Take Control of Your Money! The goal: get a hold of your financial standing! With checking and savings accounts, student loans, credit cards, and the like, this may seem a bit daunting at first, but in less time than it took you to watch Airplane!, you’ll be solidly on the path to Taking Control of Your Money. So, how we gonna do this?
1) Gather the latest financial statements for all your accounts: Dig up all those statements you get every month from your checking accounts, savings accounts, investment accounts, etc. These can be on paper or, if you’re like me, online. Either way, get them all in one place: print them out, put them in a spreadsheet, write them down on the back of a napkin, whatever. The point here is to find out how much money you have and how much money you owe.
2) Add up your assets: This includes the balances in your checking and savings accounts, any investments you have, and any cash you have on hand. Add up all the balances and you have your total assets.
3) Add up your liabilities: Similar to #2, but with any money you owe: student loans, car loans, credit card debt, etc. Figure it out and add it up and viola!, your total liabilites
4) Figure out your net worth: Easy, subtract your liabilities from your assets. A positive number is good, you have more money than you owe. A negative number isn’t necessarily bad (student loans are good debt, a reasonable car or home loan that you can afford to pay off on time isn’t evil, either), but the goal is to be in the black.
In today’s online world, all that should have taken about half an hour. If you’re willing to spend another half an hour, you can set all this information up at Mint, an excellent site where you can link all your accounts and have it automatically update your balances, calculate your net worth, track your spending and investments, and so much more.
Now you know where you stand with your money. Next time, we’ll take a closer look at where you get your money and how you spend it. Warning: what you find just may shock you.
