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Last Updated on by Noni May
There are lots of variables in life which affect its direction. Sometimes they are unexpected and difficult to deal with. At other times, you can anticipate what is going to happen in the near future and do something to change it. The amount of control that you truly have over your life is a point of debate, and besides, it is different for every person. Some people are so organised that you imagine they know every detail of their lives down to the last full stop. Others are more relaxed and let themselves go where life takes them. Both approaches have their advantages and disadvantages and ultimately, neither is intrinsically better than the other.
In any case, perspective is always useful, and if you are at a stage in your life where you want to have a better picture of where you stand, you may want to do some investigating. It’s important because what you’ll learn can crucial when it comes to making decisions about your future. Here are a few ways that you can calculate how well you are doing and if anything needs to change:
First, working out where you stand financially allows you to make more informed decisions when it comes to the other parts of your life. One of the simplest metrics by which you can judge how you are doing is by calculating the worth of your assets and then subtracting the amount of debt that you have. The number that you end up with will give you a good indication of how much you can afford to spend in the future and how much you still need to save. If the number is less than zero, then your first priority should always be to pay off your debts as quickly as possible.
Buying a house is an ambition of every young professional but whether it is possible right now is obviously central to many other decisions in your life. For instance, you may be frustrated that you are paying an excessive amount in rent every month and having nothing concrete to show for it in the form of a place of your own. On the other hand, getting a mortgage is a massive responsibility, one which should not be taken lightly. If you want to find out whether or not it is the right time to think about buying, you can check by using a mortgage approval calculator. It may be that you have to keep renting for a while before you can think again about buying again.
Another big decision for every adult is whether or not they want children. Emotional considerations aside, having a child can be an immensely expensive thing to do and before you find yourself in the position where you realise you cannot afford it, you should project the costs of childcare, food, clothes, toys, schooling and everything else onto your future earnings to see how they match up.
It is the responsibility of every adult to make the right financial choices for them. Knowing your current financial status is the first step in doing this.