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How to Take a Financial Snapshot

This is step one in my series on creating your five year spending plan. If you have no idea what I’m talking about then check out this post for an introduction. As you know if you’ve been here a while my focus is helping you to create your future and not just let it happen. In November we’re focusing on money and thinking about where you want to be financially in five years’ time. Firstly we’re going to assess where you are at the moment by taking a financial snapshot, then I’ll help you to think about where you want to be in the future. The next step will be to develop a plan of how you’re going to get there.

So let’s get started…

silver laptop and white cup on table
Now comes the hard part
Taking a Financial Snapshot

This is going to take a bit of work, but it will be worth it. You’re gonna have to sit down and either log on in various places or pull out a few statements.

You need to jump right in and have a look at what you owe. This is going to be on your mortgage, credit cards, student loans, car loans, rent arrears, catalogue payments. Anything where you own something or have received a service, but you haven’t paid for it in full.

Next is going to be the nice bit – a look at any savings or investments you have. If you’re just starting out in life the answer might be a big fat zero, but even a savings account with a couple of hundred pounds is a good start.

The next bit is going to involve some adding up
The Math(s)

What you need to do next is a sum – a simple sum, but nevertheless it’s maths. Write down the total of your savings and investments and take away the total amount that you owe. The answer will tell you your current financial snapshot. It might be a negative number – in fact I’d be surprised if it isn’t, but don’t worry, that won’t always be the case.

Including the value of a home you own is irrelevant unless you’re planning to sell it
Net Worth

Some people would include the value of items that you own in the savings or investments section to work out what they would call ‘your net worth’. Having read ‘Rich Dad, Poor Dad’ by Robert Kiyosaki my views are that unless you’re planning to move any time soon or are going to sell your car, then that is irrelevant. What is much more useful to know is how much money you actually have at this point in time.

So there you have it, your current financial snapshot. After doing that it may make you feel a little depressed. Perhaps you’ve got a large mortgage or thousands of pounds of student loan debt. The truth is, whether you think about it or not, it will still be there. Once you have a realistic picture of your current situation you can start focusing on the positives – where you are going to be in the future and how you are going to get there. We all have to start somewhere.

If you have any questions just let me know down in the comments and I will try and help. Next time we’ll be looking at the exciting bit – where you want to be with your money in five years’ time.




November 21, 2021 at 10:50 pm

Hi Sam

I totally agree – you should never take the value of your home in to account as part of Net Worth unless you are counting on selling sometime soon. More important is how much you owe (if anything) and how much longer to pay the bligher off!

Value of your home is however great for congratulating yourself for being good at adulting, and glad you got in to the market when you did!

Great advice


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