| Eve & Elle Admin
When you are over 30 it is vital to know your financial health. When you are financially stable you will have time to focus on other things without having to worry about how your finances look, if you would put it all together.
The best way to set up your budget
It is important to have a budget. It will give you structure and guidance. It will make you think twice on how you spent your money and more importantly why you are spending it. Make sure to understand what it is that you value, that is where you should be spending your money. Then every quarter revisit your budget and see if it is still in line with the goals you want to get out of it. Great starts to set up a budget are the 50/20/30 rule or the envelope system. Not every budget method is for you, so make sure that it works with you, not against you.
Your debt against interest ratio
Yes this can be a bit complicated but worth having a look at. Look at where you have debts and against what interest rate. The easiest way is to set this up in an excel sheet. Yearly check if the interest that you are paying on these debts (and this includes your mortgage and car loans, etc.) is still in line with the market. Check if there is any way that you can reduce your interest rate; this way more of your monthly payment will go towards relieving your debt instead of just paying the loan interest. Most banks are open to a conversation, if you have the right arguments. And off course always check if you can upscale your payments. The sooner you are out of debt, the better.
Your pension plan
We all get old (hopefully) and we all want to enjoy our retirement, so make sure to work towards that goal. Calculate what you might need, and start looking at ways to save money especially for that purpose. Be sure to be aware of the numbers and be ready with a plan.
Your Net WorthYou should know which areas of your financial health, are indeed healthy or toxic. Calculating your Net Worth is a great exercise to do this. You calculate your Net Worth by subtracting your Assets (everything you own) from your Liabilities (anything you owe). Here is a free worksheet to get you going. Make sure to keep track of your Net Worth over time, to see where and how you are increasing and where you need to pay attention to stop decreasing.