How to find financial calm in four revealing steps

Amy, a successful furniture restorer, wanted to sell her business and move to the country. However, she was worried about money and didn't know her net worth. After working with Jeremy to create financial statements, Amy was shocked to find out she was worth more than expected. This led to financial calm and the ability to make informed decisions. Jeremy emphasizes the importance of knowing your financial situation and provides steps to create basic financial statements: assets, liabilities, income, and expenditure. By understanding your figures, you can achieve financial calm and make better choices for your life and money. Hello, Jeremy Deets here and welcome to the Insider Post for Sunday the 14th of April, How to Find Financial Calm in 4 Revealing Steps. I'll never forget Amy. Amy ran a successful furniture restoration business. She had a workshop in South London and employed two permanent staff, sometimes outsourcing work to other restorers. Amy, in her mid-fifties, was considering selling her business and relocating to the country. She dreamed of undertaking a few limited private commissions to keep her hand in, whilst using her free time to garden and travel. However, financial calm eluded Amy, who worried about money. She wondered if she could afford to change and if her money would run out before she did. Working out the figures. I worked with Amy to create the foundations for a plan, including, with my help and encouragement, a set of asset, liability, income and expenditure statements. When we had a figure for Amy's net worth, I asked if this was what she expected. I was amazed to discover Amy had no idea of her worth and she was shocked to find out she was worth far more than expected. The look on her face made for one of those unforgettable moments. However, the financial statements led to financial calm so Amy could make informed decisions about what to do next. Ignorance is not bliss. Unfortunately, fear is the dominant emotion around money and often comes from ignorance. Knowing where you stand, even if it could be better, can help you attain a sense of financial calm. At least you can do something about it. So, start by compiling some basic financial statements. Assets. Include everything financial from cash to pension funds, but don't include a value for used assets such as your house. Liabilities. Include short-term liabilities such as credit card balances, unsecured loans and longer-term secured loans such as mortgages. Your assets are your assets minus your liabilities. Income. Have an annual date in mind, which could be the start of the year, your birthday, the tax year or your business year. For parents and teachers, the beginning of the academic year makes sense. As your own boss, your income is governed by your capacity. Time is limited and there is only so much time to service clients. Work out your capacity and estimate how much you will fill in a year. Stay within 80% of your capacity. Leave time for unforeseen events and non-income generating activities such as marketing and administration. Expenditure. Measuring your spending can be challenging. Practically, accounting for numerous small expenditures is tedious, while the emotions aroused by seeing where your money is going can be a barrier. A small investment in the cash flow app is worthwhile. Deduct your annual expenditure from your income to see if your cash flow is positive or negative. Inclusion. Your relationship with money is significant, so it helps enormously to know your figures. These four revealing statements will provide financial calm enabling you to make informed decisions about what to do with your life and money.