By Tony Delane, CFP®, AIF®, Wealth Advisor
Key Takeaways
- Financial awareness means understanding the full picture of your finances. This includes cash flow, assets, liabilities, and how they support long-term goals.
- Tracking cash flow is often the first step. Reviewing income and spending patterns can reveal where money is going and highlight opportunities to adjust.
- A personal balance sheet provides clarity. Understanding what you own and what you owe helps connect current financial resources with future planning.
- Tax awareness helps support better financial decisions. Knowing how income, deductions, and investment accounts interact can help improve long-term outcomes.
- Consistency builds financial confidence. Small habits like reviewing statements, updating contributions, and organizing upcoming expenses can strengthen financial discipline over time.
What is Financial Awareness?
Financial awareness is one of those phrases we might hear often, but rarely stop to define. Here’s what we would say. For us, financial awareness means understanding the flow of your financial life: what comes in, what goes out, what you own, what you owe, and how all those pieces work together to support your long-term goals.
It doesn’t require mastering technical jargon or becoming an investment expert. Instead, it’s about building enough clarity and consistency to make decisions with confidence.
How do you increase your financial awareness? Begin by knowing where you stand.
1. Start by tracking your cash flow
For many, financial awareness starts with getting a true sense of cash flow. Most of us know our income, but we may not have an accurate picture of where our money goes throughout the month – and the year.
Small expenses add up quickly. Larger recurring costs such as property taxes, insurance premiums, tuition payments, or travel are often due unevenly throughout the year. It’s important to step back and review both the predictable and less predictable components of spending.
We would suggest using one of the many online tools available to track and categorize spending. It may feel daunting at first, but it’s a good habit to start.
2. Know your balance sheet
Another key component of financial awareness is understanding your balance sheet. This is the inventory of your assets and liabilities, and how they work together to support future goals.
A balance sheet includes straightforward items like savings accounts and car loans, but also areas that tend to be overlooked: employer benefits, insurance coverages, and retirement account balances.
We would argue that “future” assets such as the value of your human capital or Social Security should be included too. They are not resources that you can spend immediately, but still important to consider in your overall picture. Part of our process at HH involves a deep dive into clients’ balance sheets to help uncover important components.
3. Be aware of your tax situation
Tax awareness plays a meaningful role as well. You don’t need to become a tax professional, but understanding the basics such as how your income is taxed, what deductions or credits you tend to use, and how your investment accounts interact with your tax situation can help you make more informed choices throughout the year.
Even something as simple as recognizing which accounts to draw from first when covering expenses can have a real impact over time. Small adjustments create long-term benefits.
Start small and build on your financial knowledge and discipline
So how do you become more financially aware? In our experience, the best approach is to start small and build consistency.
Begin by reviewing recent bank and credit card statements to get a realistic view of spending. Organize upcoming expenses you know are on the horizon. Revisit your retirement plan contributions and confirm they match your long-term savings goals. Make sure insurance coverages are up to date and appropriate for your situation.
These are not tasks that you need to handle all at once. Building good financial habits can take time, and we’re here to help you in your journey. Reach out to Halbert Hargrove to see how we can support your financial goals.
Halbert Hargrove Global Advisors, LLC (“HH”) is an SEC registered investment adviser with its principal place of business in Long Beach, California. HH may only transact business in those states in which it is registered, notice filed, or qualifies for an exemption or exclusion from registration or notice filing requirements. Registration does not imply a certain level of skill or training. For information pertaining to the registration status of HH, please contact HH or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov). Additional information about HH, including our registration status, fees, and services can be found at www.halberthargrove.com.
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