CashFlow & Budgeting
Know Where you stand - Networth Template.
The average net worth of a resident in UAE is $99000, while the global average is $87,489.
Are you Financially better off or worse than at the beginning of the year?
How do you know if you have made financial progress this year?
Every year many trading and manufacturing firms all over the world close for a day or two for an annual stocktaking.
During this period they audit the physical stock and compare it with the inventory on records to get an exact stock position of the company.
Perhaps the phrase "Taking Stock" had its origin from this process.
Like how the annual stock-taking process helps the firms to get an exact inventory of goods, raw materials, and work in progress, A year-end financial review helps you determine if you have made progress with your finances in a particular year, and by how much.
We live and work in UAE, to be able to earn and save more than what is possible in our home countries. If we don't measure our progress every year, it is easy to lose focus and wander off track.
Also, It would be difficult to know which areas need improvement, if we don't know where we are lacking.
2021 has been a year like no other. The global economy is slowly recovering from the pandemic, while new variants are causing further uncertainty. Volatile stock markets, sky-high inflation, layoffs, and social restrictions on and off. We have seen them all this year.
Taking stock of your finances this year is all the more important, as we are slowly inching out of the Pandemic. Our income and expenses have changed drastically this year and so may have our financial goals and priorities.
This holiday season is a great time to re-evaluate your financial position, review your goals and be better prepared for the financial opportunities & challenges in the next year.
You would need the following tools to take stock of your financial position in 2021
Download & Print these three tools, before you start the review.
Reflect upon the past year to answer the following questions on the Review Questionnaire
It is a simple yes or no checklist and it will not take more than 10 minutes to complete it.
This template can help you make a detailed comparison of your assets and liabilities. It also enables you to calculate the number of months you can survive without an income.
Once you have ascertained your net worth for both periods, you will know if it increased or decreased and by how much?
If it has increased, it means you have done well and keep doing the same in 2022 as well.
If your Net-worth has decreased, then think about what contributed to this decrease, maybe you have made a large purchase/expense during the year. Also, think about how you can avoid such expenses in the next year.
Completing these 3 steps will help you complete the Year-end Financial Review, enabling you to gain insights about your progress in the year, expense patterns, and money habits.
You can use this information to take control of your finances in 2022.
If you have not made a personal budget yet, do it now for the next year. Download this simple Budget Planner Template or use a Smart Phone app to create your budget for 2022
Record expenses regularly to help you keep track of your expenses. Read this article - how to keep your budget on track?
Meet your financial advisor to conduct an annual review of your financial plan and investments
Click here to arrange a Free Consultation
Let me know if this was helpful to you, and if you have any suggestions or improvements.
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Author, Blogger & Independent Financial Advisor. My goal is to give you actionable tools for creating passive income and building wealth. More than 10,000 expats have already used my ideas to jumpstart their journey towards financial independence. Connect with me to start yours...
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