Do you know how much you owe to banks or other financial institutions in the form of loans? If not, here's a simple way of finding out.
Here's how you can calculate this figure:
Step 1: Gather all the information from your financial records: get your latest bank statements, from all your accounts.
If your loan is from another financial institution, you can request them for a monthly statement for your loan. Make sure you check your email inbox regularly and have these records in one place.
Step 2: Of these statements, pull out all information about all the loan that you hold, such as, outstanding credit card bills, student loans, car loans, home loans or any other personal loans.
Step 3: Make a list of all these loans which you need to repay, with the time remaining to repay it, you can also create a table for a clearer view of your liabilities, which may look like this:
Step 4: Add up the columns:
#1. Add up the principle amount column, to arrive at the total sum of how much you actually owe to the banks.
#2. Then sum up the remaining amount left to be paid, so that you know what you actually owe at present.
#3. Then add up the EMI column, to arrive at your fixed monthly expenditure that tells you how much you have to pay every month.
#4. Finally, check how many months do you have to start paying off all the debts.
After this short exercise, you will get an idea of the total of your liabilities in one place. This is instrumental of arriving at your total net worth, in the weeks to come. Watch this space!
This 15 part series helps you identify and complete a single task every day for 15 days to take charge of your financial life. Over these 15 tasks, you will know more about your money and how to make it work harder while having to do less work and also worry less.