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Financial Conversations with Fitz #90 - Year End Planning - How Did I Do This Year? - 12/29/2010

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Oh, this  Iowa Winter!!!!!   Weather about as variable as the markets both for Ag and the Dow.   Say, before I go any further, I want to thank  our street and road people for all of their efforts at the same time.   We can’t do anything about the weather, but we can do something about our finances.

The first thing we need to do is to make a mark in “the sand” or on the ‘door jam’…..This is called a personal net worth statement.
If you haven’t done this before this is the year to start……I am not talking about your investments or their growth, but I am talking about you recording what YOU did.   You need to capture your data on where you stand on December 31st.   The easy way to do it is to record all your different bank accounts—Savings, checking and loan accounts.   Enter your retirement, IRA and company 401 K or if gov’t your IPERS and annuities……List your vehicles that you own.  You will have to wait for your credit card statements that will be coming out in January.  Some of your insurance and annuity data will be coming shortly.   You need to write down the slot on where to put it.  You can use a computer program or a notebook sheet of paper.   Put your date at the top and your different entities along the left side of your paper.  That way you can save and just fill in the data next year.   As far as your house goes put down what you paid for it.  The same with your mortgage.   Then each year you can check your finance firm loan balance.  Car loans the same way.  I usually don’t list household furnishing or clothing.  They don’t have a resale value.  If your debt is growing more than your purchases that you can show as still on hand, you need to make an adjustment.  Part time work by family or lessen your purchases.   I like to also breakdown what I spent that was absolutely necessary to live and maintain a household plus what I spent that was elective.  But keep it simple…….

This computation is figuring your personal net worth.   You add up all your assets (things you own)  and all your debt (Firms you own money to).   The difference between the two totals is your net worth.   You can check out books or magazines at the library for help.  I like the ‘personal finance’ section of ISU Extension…..Just go on the internet to IOWA State Extension/finances/personal…..There all kinds of resource material and classes listed there for a low cost or even free from your local extension office.   WE will be sponsoring a series of classes this winter in our trade area.  Listen to us here or watch the papers for more details. 

Happy New Year!

Call or stop in to see us if you have any questions in any of our three offices.  You have three days to record something in 2010!!!!!!! 

Remember that you should deal with people in community banks and organizations.  When you work with them, you know that you will also see them sitting with you at ball games, church or community events.  So, if in doubt give us a call.