Understanding your financial situation is the first step in financial management.
As a financial planner, I often encounter the following situations when dealing with clients: some people always hesitate when it comes to consumption, unsure whether they should spend the money or if it exceeds their financial capacity; others are unaware of their own financial situation and even less aware of how to optimize it. Even worse, some people don't even clearly know how much assets they have.
In fact, for personal and family financial management, understanding your own financial status is the most basic step. Knowing yourself and your situation ensures success, only by having a clear understanding of your financial standing can you address issues accordingly and clarify your financial needs and goals. Asset planning and investment portfolios are subsequent steps.
However, understanding your financial standing isn't as simple as knowing the amount in your bank account, nor is it merely about keeping a daily record of your expenses. There are several things you need to do.