My Personal Financial SWOT Analysis
If you took any high level business class in college, you most likely learned about a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is an awesome tool that many businesses use to analyze internal and external factors that will affect the company’s future performance.
Another great aspect about this tool is that it can be applied to your personal finances as well. With a little thought and a couple of minutes, you can figure out how well you are doing financially, what areas you can improve upon, and then use this data to better plan for your future finances. Below is my personal SWOT analysis.
What are your financial STRENGTHS?
“As yourself these questions: What are your strong areas in finances? Do you have a balanced budget each month? Did your income recently increase? Are you debt free?”
I have both a Bachelor’s degree in accounting as well as an MBA. I have a balanced budget each month and usually have a bit left over that goes into savings. I got a raise right before the new year and already have over $12,000 in my retirement accounts.
What are your financial WEAKNESSES?
“Helpful questions: Have you maxed out your income potential in your current job? Are you in debt? Are you living paycheck to paycheck?”
My biggest weakness right now is my debt. I owe more on my car than what it’s worth (about $3,500 thanks to taxes and fees) and I also have about $7k in student loans.
What are your financial OPPORTUNITIES?
“Financial opportunities: Freelance work, tax preparation, consulting, writing, crafts, overtime, investing, earning a promotion, selling items on Ebay or Craigslist, debt consolidation, eliminating exposure to poor investments, reducing investment fees, downsizing your house, buying a more fuel efficient car, etc.”
I feel like I don’t have a ton of financial opportunities at the moment. Ideally, we would like to make some profit from this blog so I think continuing to work on this site would be considered an opportunity. I would also say marrying Jake will be an opportunity! We get to combine our finances which will mean double income and fewer expenses (since we live apart, we essentially have double the living expenses).
What are your financial THREATS?
“External factors to consider: Are you in danger of losing your job? What are the current economic factors that may affect your job/investments/income streams?”
Thankfully the company I work for has great job security so I don’t feel threatened that I will lose my job ever. The biggest threat right now is probably how the current administration is affecting the stock market which might negatively impact how my Roth IRA and 401K are doing.
Take some time to determine your own SWOT analysis, it can only help you!