The first step to your financial path is to accurately identify your current situation. In fact, to reach a certain destination we have to know our starting point.
We propose that you focus today on the construction of your Financial Statement.
First, what is the Financial Statement?
In a nutshell, the Financial Statement is the accurate identification of your assets (from home, car and other assets) and your debts and their characteristics. It seems simple, but many people are not sure how many debts they have …
We suggest that you consult the Yolo Bank website and request your map of credit responsibilities (possible by entering your taxpayer number and password to access the finance portal). Then, identify the following four characteristics:
- Purpose of the credit;
- Amount owed;
- Term of the Loan;
- Interest rate.
Caution: If you are married you should consult your map and your spouse’s map!
Once you have done this survey, try to assess your assets in order to know the value of your assets. In reality, having a credit for home purchase also has a housing as an asset. So your financial picture is improved (which has a positive impact on your motivation).
Debts are not bad at departure …
An idea that should be made clear from the beginning. Debt is not a bad thing to start with. What makes something good or bad is the use we make of it. We can use credit responsibly and get very good results:
- It allows an investment of value creation;
- It allows the purchase of an adequate housing our needs and possibilities (avoiding the payment of an income to the landlord).
By the negative, however, the use of credit for the purchase of something beyond our means or for the purchase of goods that are not essential to our lives can bring some discomfort:
- Payment of interest at high rates;
- Budgetary imbalance;
- Being stuck in an unwanted financial commitment.
Not everything is bad news. Having made a rigorous diagnosis of the family’s indebtedness, it is able to analyze ways of reducing financial costs , which can be achieved through the consolidation of credits.