University of Illinois Extension

Assessing Your Financial Situation

Questions To Ask Yourself

Take a good look at what you have written down and answer the following questions:

  • How long will your savings last if you use them to pay current living expenses?
  • Where are most of your assets? Are they mostly in one item or category, such as your house, business, or retirement plan?
  • How much of your assets are liquid, or easy to turn into cash?
  • How much do you have in bank accounts that can be used during your current financial emergency?
  • What investments could be sold or converted to cash to help pay current bills?
  • Are your investments concentrated in one asset class or company, such as the stock of the company you work for?
  • How much equity do you have in your house? Take your home’s current market value and subtract the balance on your mortgage.
  • Do you have any vehicles or other personal property that could be sold?
  • Do you have cash value life insurance against which you could borrow?
  • Are your assets greater than your liabilities?
  • Are you behind in any of your payments?
  • Is there a way to lower your interest payments by paying off any of your debts? Can you refinance any of your loans to lower the monthly payments?
  • Are there any items you recently purchased on credit that could be surrendered or given back to the creditor to remove the debt?

Other Important Assets

Remember that your family has other important assets that don’t show up on the net worth statement. Assets such as education, experience, skills and knowledge are hard to put a dollar value on, but don’t overlook them as a resource to help meet expenses.

Use the Family Resources worksheet to identify these important family resources. Talk to family members about ways to use their assets to help during this period of reduced income, and in the future. For more ideas, see Bartering.

Liquidating Your Assets

Using your savings is one way to supplement your income. Be cautious, however, about using savings for things that aren’t a high priority. You may need those dollars for other emergencies such as car repairs or medical bills. Setting spending priorities and decreasing expenses are essential steps in making the most of your assets. It may take time to reduce your expenses to match your current income. View using your savings as only a stop-gap measure until you can permanently reduce your expenses to match your new situation.

Another source of funds to help carry you through a financial crisis is selling items that you no longer need, could do without, or can’t afford to keep. Survey your house, basement, garage and attic for items that could be sold.

Determining a selling price. Do some research to find out what your items are worth. Check E-Bay.com or visit resale shops and garage sales to find out the going price for similar items.

Finding a buyer. You can’t sell any of your possessions unless you find someone willing to buy them. Think about ways you can inform prospective buyers of what you want to sell. Community bulletin boards in supermarkets, shopping malls and laundromats are very popular for posting “For Sale” notices. Cards with small tear-off tabs listing your phone number and the item for sale make it easier for buyers to call you. Other inexpensive ways to advertise your sale items are radio call-in shows that allow for sale items and classified ads in newspapers or shopper publications. Having a yard sale or selling items on line are other options.

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