Financial independence is one of most important goals for most people. Yet people sometimes miss opportunity to become financially independent because they avoid making decisions and taking action to influence their financial well being. Sometimes they may not know what action to take. At other times, they simply procrastinate.

Understanding and evaluating where you stand today in terms of your finances is first step in taking action and developing any sound investment plan.

You have to determine your net worth (your assets minus your liabilities) and what percentage of your resources you can apply to meeting your financial goals.

Net worth is main measurement of your wealth. The best ways to increase your net worth are to increase your assets and to reduce your debts.

The other number to look at in evaluating your financial situation is your net income (your gross income minus your expenses).

Create some good financial habits by taking a look at where you are now. Where do you want to be? Follow these tips to help you get there.

- Keep a money diary for a week. If you don’t know where you spend your money, you can’t start making changes. Carry a notebook with you and write down every single penny you spend as soon as you spend it, every day for a week – every bill, standing order, newspaper, snack, bus fare, coffee … At end of week look at where it all went. Can you see any areas where you could make changes?

- What is your minimum survival income? How much do you need to pay for basics like mortgage, rent, insurance, bills, food and car each month? Aim to save at least three times your monthly survival income with easy access in case of emergency.

- Your monthly expenditure. Work out what you spend monthly on everything else: meals out, entertaining, clothes, holidays, presents, credit card repayments etc. etc. Including basics, compare your total outgoings with your income. Where’s fit? Are you overspending?