Chapter 1
Assessing Where You
Are Financially
In This Chapter
Being honest with yourself about money
Finding out about credit reports and your FICO score
Comparing your spending to your income
Figuring out what you own and what you owe
Y
ou've bought this book, so we assume you're probably at least a little
worried -- maybe really worried -- about your financial health. Perhaps
your debts have you biting your nails, and you're not sure what to do about
them. We doubt you're reading this book for the fun of it! And you probably
don't have a good handle on the true state of your finances. After all, it's
human nature to try to avoid bad news.
We understand. Facing financial facts can be unsettling and even scary.
When you know the state of your finances, it becomes hard to ignore the
fact that improving your financial situation requires changing your lifestyle
and making some big sacrifices. But no matter how scary it is, confronting
the reality of your financial situation is essential -- and the good news is that
seeking out this book is a terrific first step to doing just that.
This chapter begins your next step: figuring out where you are so you know
where you need to go. Until you come face to face with the actual facts of
your finances, you may find it impossible to develop the resolve and self-
discipline you need to implement your plan of action. That's why we begin
with this series of fact-finding exercises to get you going.
The more bad news you get as you complete these exercises, the more criti-
cal it is that you get serious about dealing with your debts. The sooner you
do that, the quicker and easier it will be to improve your finances and the
less likely that your creditors will take some of your assets or that you'll have
to file for bankruptcy. So let's get going!
