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Tracking Financial Progress

I was recently featured in an article on discussing what it means to be good with money and important financial metrics to track. I believe a three-step framework for discussing what is important, planning, then tracking goal progress can be highly effective.

How to track financial progress

Deciding what’s important

Before a family can start to track their progress towards their financial objectives, it is helpful to take some time to first think about what is important. This likely will involve a discussion around competing priorities, objectives, and upcoming expenses. This balancing act centers around each family’s preferences for what to prioritize now versus later.

Start with savings

When you begin your planning process it can be easier to start with a review of your current savings totals. Are you comfortable with what you are saving? Some examples of categories to consider are:

· Do we have adequate cash balances in the event of an emergency?

· Are we funding and saving a desired amount for college education?

· Are there shorter-term objectives like a house renovation, a new car purchase, or a trip we should be planning for?

Track goal progress

Tracking your net worth is a great tool to assist you in meeting your financial goals and objectives. Your net worth is your total assets minus your liabilities. Also, tracking your assets over time allows you to more specifically focus on areas of your net-worth and finances you want to improve.

Two valuable aspects of tracking your assets are:

1. You can track time-period goals (monthly, quarterly, etc.) for cash balances, liability balances, and retirement-funding amounts.

2. Another benefit of tracking your assets over time is that you will start to see them really start to grow. This can be incredibly motivating and many times will lead families to save and invest even more.

GuidePoint Financial Planning - Reston Financial Planning

Ryan Phillips, CFA, CFP® is the founder of GuidePoint Financial Planning. He is passionate about helping busy families plan, save, and invest for their financial future. Contact him today if you are interested in learning more about the benefits of working with a fee-only (no-commission) financial planner.

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