Getting Your Financial Snapshot

Breakdown

Just in time for anyone wanting another New Years resolution, I’m gonna go into how to get a “financial snapshot”, otherwise known as “Ughhhhhhhh”. Look, I know it sucks - but seriously, if you don’t know where you’re at you can’t know where you’re going /endFortuneCookie. Plus you can knock it out in an hour or two then immediately mark “Figure out my finances” off your resolutions list. We’re not solving all your money troubles here, the goal is to get the full picture - deciding to tackle any problems that may arise can come later.

This is my first step every single time someone has come to me trying to change their financial situation, good or bad. How can we possibly figure out avenues to improve your situation if you don’t know what your situation really is? You wanna get out of debt? You want to retire at 40? You need to save for front row Taylor Swift tickets? If you are seriously wanting to change your financial situation, this has to be your first step (have you seen how expensive those tickets get???).

Without further soapboxing, let’s get into the…

Attack Plan

1. Tally Your Monthly Bills

• List Out Everything: Rent/mortgage, utilities, groceries, gas, phone bills, streaming services, gym memberships, etc.

• Start Adding: Write down the total due for each bill alongside its due date. This helps you see not just how much you owe but also when your bank account might look a little lighter.

Why It Matters: Gotta know your total money out every month. Don’t guess. If something’s variable, then get an average over a few months. I know it takes time but this is the longest part of this whole process, don’t slack here - it’s crucial. This also gives you a chance to potentially make some easy cuts if you find something you don’t really use anymore (like a streaming service you forgot you subscribed to for the Olympics).

2. Identify All Debts & Their Interest Rates

• Credit Cards: Write down your balances and APRs (annual percentage rates).

• Loans: Student loans, personal loans, car loans—whatever it is, note both remaining balance and interest rate.

Why It Matters: Having a visual of your debts side by side helps you figure out a strategy and target to aim for if reducing debt is your next goal. When you can see that one debt is accruing interest at double the rate of another, it’s easier to know where to throw extra payments.

3. Check Your Investments & Returns (If applicable)

• Where Are You Investing?: 401(k)? IRA? Under the mattress? Write it all down.

• Asset Allocation: Stocks, bonds, Incan matrimonial head masks, whatever - make sure it still aligns with your risk tolerance and future goals.

• Review Performance: Are you comfortable with your current returns? Are you too heavy into one sector? Are you happy with your current trajectory?

Why It Matters: If you’re investing, you want to know how your money is growing. If something’s not pulling its weight, it might be time to shuffle stuff around. The key is understanding what you own and why.

Finally, bust out the ti-89 (… are those still a thing?)

Start figuring out:

• Income: How much is actually hitting your account each pay period after taxes, benefits, etc.?

• Expenses: Sum all the outflows we got earlier.

• Subtract stuff: Income minus expenses, that’s it.

• Dance hard techno: Congrats, you’ve done more for your financial future than 90% of the people I’ve worked with.

All of that boiling down into “take your money in and subtract your money out” seems kind of ridiculous, but I have met very few people who have done this once in their life, let alone once a year. You’re not working off stuff in your head - you’re looking at your transaction history, you’re writing stuff down, you’re not being judgmental, not drawing conclusions - pure Vulcan on your finances. The impact of “Oh %$@# I spend $450/mo. on Door Dash!” when you told yourself “I probably spend like $50/mo. on Door Dash,” can’t be overstated (this is a true story from someone I worked with).

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Wrap Up

This snapshot is your baseline and from that baseline is where you start no matter what financial goal you have. Tackling debt? You now know which one is hurting you the most. Want to retire early? You now know how far you’ve got left. Those front row Taylor tickets? You now know you need to sell a kidney. Step one to any number of financial goals starts here.

Thanks for reading!

Jake

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Mandatory reminder

Hello friend, I’m thrilled to share my insights and findings with you. While I put a lot of effort into researching and presenting accurate information, it's always a good idea to double-check and verify anything you read online. Consider this newsletter a starting point, and don’t hesitate to do your own research to make informed decisions.

If you found this information useful, I’d greatly appreciate you sharing it with a friend or colleague who might find some benefit in it. Ideally we’d be learning this stuff before graduating high school, but some random person on the internet is the next best thing, right?