Maybe you’ve heard the term “financial snapshot” floating around.

Or, maybe you haven’t but it just intuitively makes sense to you.

A financial snapshot can look a lot of ways, and show you a lot of things: your overall financial situation, how your lifestyle may be impacting your financial goals, how you can expect your investments to continue to perform, and plenty more.

However, reaching the point of actually having an accurate financial snapshot can be a little mysterious.

So we created this guide to take the mystery out of getting there.

Read on to learn:

  • How to create your own financial snapshot tool in 5 steps
  • The details behind what can be included in a financial snapshot
  • Some key reasons to get your financial snapshot tool up and running 
  • When to take financial snapshots

What is a Financial Snapshot? 

Just like a snapshot in the photography world, a financial snapshot captures a moment in time when it comes to your finances.

A robust financial snapshot can capture a lot of different elements of your financial life, such as:

  • Spending on necessities and nonessentials  
  • Real income 
  • Progress on saving toward near-term goals (vacation, real estate, etc.) 
  • Retirement savings 
  • Emergency preparedness 
  • Investment performance 
  • Estate plans 
  • Insurance coverage (life and disability)
  • Net worth 
a financial snapshot captures a moment in time when it comes to your finances

Why Take a Financial Snapshot? 

Now, let’s discuss the most pivotal ways in which a financial snapshot can help you out.

Gain Control Over Your Financial Health

On a journey to save up toward a vacation — or an early retirement?

The only way to successfully navigate your way down that path is to clearly know the point from which you’re starting and the targets you need to hit along the way.

If you don't understand the current state of your finances or how they tend to change over time, how will you know how much you need to save, where you can cut spending to save that amount, and when you should arrive at your financial goal?

Knowing the state of your finances is the only way to really control them, and also enjoy the peace of mind that comes from that feeling of certainty (as much as anything can be certain, of course).

Set and Progress Toward (Realistic) Goals

Speaking of those big goals you want to spend your money on, taking regular snapshots that uncover your financial health will help you hold yourself accountable to working toward your goals.

In addition, your understanding of what progress looks like — and what’s ultimately achievable — will be much more true to reality. You may find that some goals need to be adjusted to have a longer timeline. Or, you may find that with just a few tweaks to your spending you can afford something you thought you could only dream of!

Identify Patterns

Financial snapshots pull you out of your day-to-day life to help you see longer-term patterns. Some you might like to break, but others you might want to build upon.

Patterns include things like:

  • Where you spend the most money 
  • How much you spend on necessities (groceries, housing, medications, etc.) 
  • How much you shell out for nonessentials (like the new pair of non-work shoes you purchase every other month) 
  • How often “outliers” come up (for example, expensive concert tickets) — and if they’re really outliers 
  • Whether your income is increasing or decreasing over time
  • How your income compares with inflation increases

Ignorance is really not bliss when it comes to financial planning. With a financial snapshot, you get more insight into those habits of yours that you might be ignorant of — so you can change them.

When Is the Best Time to Take a Financial Snapshot?

If you’re one of the many people with anxiety around looking into your finances, know that you are not alone.

That anxiety could easily prevent you from taking your financial snapshot.

Unless you successfully reframe it.

Try to use your financial snapshot as an opportunity to celebrate.

Honor the milestones you’ve hit! Cheer for the goals you’ve achieved! And ride that motivational wave right into planning what’s next as far as financial changes, challenges, and new objectives.

But how often?

We’d recommend taking your financial snapshot yearly, at the least. Twice a year is a good cadence.

In addition, it’s often wise to revisit your financial standing before making any large, unplanned financial moves — or when something happens in your life that will majorly impact your finances (marriage, birth of a child, job change/loss, etc.)

Now, ready to take your picture? Here’s how.

Create Your Financial Snapshot Tool in 5 Steps

You’re almost there! Here’s your step-by-step tutorial for creating a financial snapshot and adopting the tools to keep it up to date.

1. Track Down All Accounts and Assets

First step, accounting for all the financial elements you want to monitor via your financial snapshot.

That means accessing all the accounts where you have money or value stored:

  • Investments: stocks, bonds, mutual funds, index funds, etc. 
  • Retirement accounts: 401(k), 403(b), IRA, etc. 
  • Bank accounts: checking accounts, savings accounts, CDs

Then, adding in all the assets you own that contribute to your net worth:

As it will impact your net worth calculation, you should also take note of any debts:

  • Loans (student loans, etc.)
  • Credit card balance(s) 
  • Mortgage(s)

Later, when it comes time to budget, you’ll also need to know your regular expenses:

  • Bills 
  • Housing 
  • Groceries 
  • Insurance (flood, car, homeowners, life, etc.)

Most of the places where these financial elements live can be accessed online today, which means you’re going to need a safe place to store a lot of login info.

And for those items that don’t live online, you probably have documentation related to your ownership — another important thing to keep track of.

In the next section, we’ll introduce you to a solution for managing these things as well as your entire financial life.

2. Monitor Accounts, Assets, Net Worth from One Powerful Platform

If you’re anything like us, in that last step you found that you have a wide variety of accounts, investments, and assets that make up your wealth.

When we realized this, and how much work it was to monitor them effectively and safely pass them down to future generations, we built Kubera.

Kubera is the best portfolio tracker for widely diversified investors

Kubera is personal balance sheet software from which you can monitor and better manage all of the things that comprise your net worth.

Net worth is a single number that aims to provide a quick summary of your financial health by taking the value of what you own (assets) minus the value of what you owe (debts).

Tracking net worth is similar to tracking something like blood pressure — it helps you understand at a glance whether your health is improving or not.

Kubera is crucial for understanding net worth as it’s the only platform where you can track every element that goes into it.

Easily track your financial accounts, assets, debts, and insurance info with the help of Kubera’s spreadsheet-like interface and integrations with hundreds of global financial institutions.

Kubera will keep a live read of your net worth right in the main dashboard. And, you can hop into the Recap screen to look at an in-depth picture of net worth, asset, and debt changes over time.

Kubera's recap shows a snapshot of portfolio changes over time

Now what about all that login info for your financial accounts and all those documents you’ve created (will, trust, etc.) to manage your finances after you’re gone?

This is another thing we realized was really hard to deal with, so we built a beneficiary management portal into Kubera. We call it a digital “Safe Deposit Box,” which you can use to protect but also automatically pass down financial data when the time comes.

3. Build Out Your Budget 

Now that you know all the cool things Kubera can do for you, you can also understand what it isn’t meant for — which is tracking day-to-day spending.

So this is where you’ll use some of the info from earlier (such as income sources and the expenses you’re spending it on) to create a budget you can really stick to!

And, no surprise, we recommend you implement software to help you with this step.

There are so many great budget platforms available today, such as:

  • Mint 
  • You Need A Budget (YNAB) 
  • Simplifi
  • Tiller 
  • Etc.

Need help narrowing the options? For a full rundown of our top picks for budgeting tools, be sure to read our budgeting app guide.

The average American saves less than 5% of their income

4. Develop Your Snapshot Tracking Tool: The Ultimate Document

You may be surprised to see us going a little old school with this step, but honestly we love the simple yet powerful nature of spreadsheets — we did build Kubera to function like a modern spreadsheet, after all!

So what we’re going to recommend now is putting all those main metrics you want to track in one place: how much money you bring in, your spending, what your investments are worth, what your accounts are worth, your net worth, etc.

This is it — this is the snapshot.

Label each entry with the date. Over time, you’ll be able to see how your data develops, giving you insight into your personal patterns, portfolio changes, net worth increases, and everything else you need to better make and reach financial goals.

This snapshot doc is another item you can password protect and store using Kubera’s beneficiary management portal.

5. Realign Using This New Information — And Get Ready for Next Time! 

This might be the last step, but it’s an important one!

Based on what you now know, you can realign your goals and strategies based on what is real. No need to rely on guesses or wishful thinking. You’ve put the work in, and part of your reward is that you can now be much more certain of your progress and timelines.

And finally, be sure to set the next date in your calendar when you’ll revisit your snapshot. Remember, the biggest benefits of tracking your financial snapshot go away if you can’t commit to checking in regularly.

Adopt Kubera to Upgrade Your Financial Snapshot

While having tons of accounts and assets is great for portfolio diversification — it can be a strain on your sanity.

If you’re struggling to keep track of your financial health, chances are your financial snapshot is suffering as well.

Upgrade your financial snapshot with Kubera — the most modern solution diversified investors can use to keep an eye on everything that makes up their wealth.

Check out our affordable, simple pricing and sign up today to access Kubera across desktop, iOS, and Android.

Work with a financial advisor or wealth manager? That’s fine! You can still enjoy all the financial tracking tools Kubera has to offer as soon as your pro signs up for the white-label solution we built just for institutional use.

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