FF Challenge – Day 1: Understand Where You’re At

The Financial Freedom Challenge begins! This is Day 1 of the Challenge and your financial life could greatly improve starting from today. This is why we need to understand our financial situation. I assure you that if you follow this challenge day by day and do what I say you will notice a huge difference in your mindset and your ability to manage money. These two things together will have incredible power over your future life.

Let’s start!

FF Challenge - Day 1: Understand Where You're at

This Challenge does not last 31 days but for life. I’ll dedicate 31 days to teach the important concepts and you need to learn them and do all the tasks. But you will have to adopt them during your entire life. As I always say Financial Freedom is not a short term goal. I started in 2017 and I’m still at the beginning of this exciting journey.

So follow this challenge, achieve the daily goal day by day and make them habits for life. It will not be easy but the final reward is wonderful!

Let’s start this exciting challenge!

Where do we start?

As you can read in the title of this first post of the Financial Freedom Challenge, our first goal is to understand our starting point.

By starting point I mean that you have to understand your current financial situation as best as you can. This is crucial because by doing so you can find out what you need to focus on.

In particular, you need to write down on paper all your assets (all your resources with an economic value) and liabilities (all your debts). Write them as precisely as possible, and divide them: left side for the assets, right side for the liabilities (or the assets above and the liabilities below).

Some examples of Assets:

  • Real Estate properties
  • Savings and Cash
  • Investments
  • Retirement plans

Some examples of Liabilities:

  • Mortgage
  • Car loans
  • Student loans
  • Credit cards

Now that you have listed all your assets and liabilities, add up all the numbers. You’ll obtain two numbers: Total Assets and Total Liabilities. Don’t worry about the numbers: we’ll work hard on them, you just need commitment and will power.

We don’t need complicated templates. Just make it simple. The important thing is to list all the elements. In the next steps, we’ll learn new concepts that deepen this topic, but for the moment this is enough. Always keep these numbers in mind.

I created a super basic Excel spreadsheet, just to show how you should set up your lists. Start from the current month.

Screen Net Worth Tracker

If you want to use my spreadsheet or simply give it a look, feel free to download it:

If you decide to use this sheet remember to substitute the name of the Asset/Liability in the tables. Example: Cancel “Asset 1”, write “House” and insert the related value.

In addition, my suggestion is to update these lists at least once a month in order to understand how your financial situation is evolving. I suggest you to schedule the updates: take your calendar and schedule the upcoming updates now.

A brief summary of today’s task of the Financial Freedom Challenge

  1. Take a sheet of paper (or open a new Excel file if you prefer, or download my spreadsheet)
  2. Divide it into left side and right side (or between above and below)
  3. Write your assets on the left side (or above)
  4. Write your liabilities on the right side (or below)
  5. Schedule the upcoming updates (every 30 days)

Here we are! This was the first step of the Financial Freedom Challenge. Easy right?

My experience

As I said in the presentation post I’m doing this path with you. I’m not financially free at the moment and I want to get it just like you. This is why in the FF Challenge articles there will be a My Experience section in which I tell you about my progress concerning the daily goal.

I began to think carefully about my financial situation in 2017 at the time of my first “serious” investments. Analyzing my situation with precision I realized I could start investing and this is precisely the reason why I decided to dedicate this first day to this task.

Final recommendations

I really hope you like this challenge. I believe it can be an extremely useful path for anyone.

Share in the comments your opinion about this first step. Were you already aware of your current financial situation or was it a new thing for you?

Come back tomorrow for the second step and remember to follow us on Facebook and Instagram! Share this challenge on your social media: this will keep you motivated during the path, trust me 🙂 If you want a direct contact with me (answers, discussions, doubts, advice…) and the other participants of the Challenge, join our Telegram groups (ENG Group, ITA Group).

Finally, subscribe to the blog if you want to receive the next steps directly on your email:

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