Personal Finance and Accounts guidance:
6. Data analysis for personal finance:
6.1.Assess your current situation_
Before you can take steps to improve your financial situation, you need to assess where you currently stand. Gather all your financial documents, including bank statements, bills, credit card statements, and investments. Look at your monthly income and expenses. Make note of any debts you have and their interest rates. Determine your net worth by subtracting your total liabilities from your total assets. This will give you a snapshot of your current financial health. If you don't know how to read these documents or you find this overwhelming, speak with a professional such as an accountant or tax advisor. Once you've assessed your personal finances and accounts, the next step is taking control.
6.2.Track your spending_
One of the most important things you can do for your personal finances is to track your spending. This will help you see where your money is going and where you can cut back. You can do this by setting up a budget or tracking your spending manually. There are also a number of apps that can help you track your spending. These include Mint, Spending Tracker, Personal Capital, Track My Spending, You Need A Budget (YNAB), Google Sheets as well as some others.
6.3.Build the supporting schedules for personal finance_
To get your personal finances and accounts in order, you'll need to do some behind-the-scenes work to get everything organized. This includes creating a budget, tracking your spending, setting up a system for paying bills, and automating your finances where possible. By taking the time to do this work now, you'll be setting yourself up for financial stability down the road. Here are the tips to get you started 1) Start with an overview of your entire financial situation:
A) Take an inventory of all of your assets (i.e., money in savings, checking, retirement accounts).
B) List all of your debts (i.e., credit cards, student loans).
C) Create a plan for paying off each debt (including what steps you can take immediately as well as how much money is going towards it monthly).
D) Determine what portion of income will go towards long-term savings or investing.
6.4.Add sensitivity analysis and scenarios for personal finance_
When it comes to personal finance, it's important to be prepared for the worst case scenario. That's why sensitivity analysis and scenarios are so important. By running different scenarios, you can see how your finances would be affected if certain things happen. This way, you can be prepared for anything that comes your way. For example, a layoff or unexpected medical expense could be tough on any budget. But with good preparation and knowledge of what may happen next, there is less stress on a person’s financial stability.
-Consider additional future events when calculating income: Running scenarios with more than one possible outcome is critical when planning for retirement savings because it helps people estimate their current needs (like daycare) as well as their future needs (such as in-home care).
-Run more than one sensitivity analysis: Run multiple sensitivity analyses before making major life decisions such as choosing a mortgage or investing in the stock market because there is no one right answer. Different people will have different priorities and goals which means they should do research before making an investment decision.
