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Where Do You Stand Financially?
If you’re like many people, you give your personal finances some attention at least at the beginning of each year.
Ideally, you would have a personal Balance Sheet and Financial Statements prepared and updated. We won’t go into detail here but I have prepared a well-structured blueprint on personal finances that I’ve used myself for years. Someday I may make it available for others.
Anyway, a Balance Sheet is essentially a list of what you own and what you owe. Hopefully, you have an excess of what you own and that would be your Net Worth.
Financial Statements include a list of all your income and all your expenses for a certain time period. Again, hopefully, you have an excess and that would be your Net Profit or Cash Receipts in excess of Cash Disbursements.
If you don’t want to fool around creating a Balance Sheet or Financial Statements, you can learn something from just these two items:
1. Your Debt to Income ratio (DTI), and
2. Your credit score
Example: Debt to Income
1. List your total gross income for a month – let’s say $6,000
List your monthly recurring expenses such as rent/mortgage, car payment, credit cards, etc. Let’s say these total about $2,400
Then divide your total monthly expenses by your total monthly income and you get 40% (2,400/6,000). Mortgage lenders like to see a DTI percentage around 36% or even less.
See Investopedia for more information on this topic: >> Debt to Income – Investopedia <<
Example: Credit Score
2. Most credit card providers now let you check your FICO score. Just look around the home page of their web site.
Where do you stand?
Credit scores – between 300 and 850
- 720 = good credit
- 650 = average credit
- 600 or less = poor
Also, each year you can get FREE credit reports from all three of the biggies – Equifax, TransUnion, Experian. Use this link: >> 3-Free Annual Credit Reports <<
Be sure and order ALL three reports, not just one or two.
Note: do NOT do an Internet search for “free credit reports”. You’ll get A LOT of results that say “free” but they ain’t! That’s all I’ll say about that. Use the link above.
Let me tell you something else: if you have never ordered credit reports before you may be in for a few BIG surprises.
Invariably, you’ll find accounts that are not yours, you’ll find individuals in the reports that you don’t know, you’ll find previous addresses where you’ve never lived – and maybe more.
It may freak you out. BUT, fear not. You can get them corrected AND it might boost your credit score.
Sit down with a highlighter and mark ALL the errors. Call the credit report company and explain to them you’d like to correct the errors. Surprisingly, you may get them corrected over the phone. They may send you an updated report where you’ll check to make sure all of the errors are gone.
One more thing – seriously. You may find it difficult to navigate each report if this is the first time looking at them. Kick back with your favorite beverage, turn off the radio (except, perhaps, with some light, classical piano music), shut down your cell phone and F O C U S! The info in the reports is placed into sections – names, addresses, payments, different accounts, etc. You’ll even see your payments for each month and if you have late payments, you’ll see them.
Do this EVERY year. You can order the three free reports only ONCE a year. Do it now.
If your credit really is a mess and co-mingled with another person, you may need a credit repair service. They can help.
Don’t let bad credit mess you up. Good credit as you wake up each morning is almost as good as a bright smile!
If you are ready for freight broker training, give me a call (below) and let’s do it; if you are NOT ready, then you had better jump into my website and learn what it takes. I get a few procrastinators from time to time; I know you all may be busy – but why wait?
The sooner you get going and get your DOT#, the sooner you can start moving loads “exponentially” all around the country not just in your locality!
Lastly, I didn’t mean to ramble on this much but I get carried away; and there’s even more detail that we could have gone in to regarding personal finances. Let me know if this has been helpful. If you don’t comment, I may think I’m wasting our time and that’s not good.