There is always a lot of talk about the national economy and worries about whether it is up or down. While the national economy may affect you, it is your own personal economy that has a far greater impact on your life. Yet, many people don't know what personal economy means or how to calculate their own personal economy.
Last year, I posted a podcast about how to assess your personal economy on my personal website. I believe that this is something everyone should be concerned about, but especially, anyone who is considering going back to school for a master's degree. In IEM, we encourage all of our students to go through this assessment, so that they know what their goals are for their education and what they need to get out of the program to grow their personal economy.
What does personal economy mean?
Personal economy includes your assets and debts, but it goes much further than that. It includes your time, career, family, interests, motivations, and other things that are important to you. While personal finance looks at how you handle your money, your personal economy shows the bigger picture of how that affects you and why it matters.
Personal economy goes beyond just increasing your net worth. Sure, that is part of it, but it also looks at how you spend your time, the sources your income is coming from, your satisfaction and opportunities in your career, the balance in your family life, your health, and what kind of life you want to live. There are many ways to gather more wealth, but without understanding what you want to get out of all of your effort, you may still find yourself unhappy, frustrated, and unfulfilled.
How do you calculate your personal economy?
You can calculate your own personal economy by using the simple personal economy assessment worksheet (PDF) that collects information about your income, time, work, goals, and more. In the worksheet are several sections that will help you calculate your income independence, emergency fund need, and current and desired net worth. The worksheet also includes a section to develop an action plan for increasing your personal economy.
In my Assessment of Your Personal Economy podcast, I go through the assessment worksheet and share some additional insight for each part. You can also download a sample of the assessment worksheet (PDF) for help in developing your action plan.
At IEM, we want our students to be successful, so we take time before they become students to make sure that IEM fits within their personal economy. If you would like to talk to us about your own personal economy and whether a master's degree can help you move toward your goals, contact us at
Why is it important?
If you have ever gone to the ATM and realized that you had no money left in your bank account, you can understand why it is important to know what your personal economy is and where you need to be. Life is unpredictable and even though you may have a great job, health, and lifestyle now, all of that can change rapidly. A good personal economy can help you prepare for those surprises. Going through a personal economy assessment can identify areas where you need to improve your finances, opportunities for secondary income sources, ways you can manage your time better, and how you can find more fulfillment in your life. Not only is a healthy personal economy good for your finances, it can also help you make sure that you are continuing to focus on the things in your life that matter to you.
How does a master's degree fit into this?
Two big factors most people look at when considering a master's degree is the amount of debt that will be incurred and how much positive impact it will have on their career. The personal economy assessment will help you understand whether you can take on the additional debt without putting your future finances at risk. It will also help you determine what you hope to achieve by getting your master's degree, and how that might affect your position at work, your salary, or future goals. In particular, people who are considering getting a master's degree so that they can start a business as their main or a secondary source of income, should complete a personal economy assessment to make sure they are prepared for the unique challenges that go along with owning a business.
If you are not certain whether a master's degree in an engineering or technical field will help you increase your personal economy, we can help you weigh your options. Fill out the form on this page to schedule a time to talk or email us
About IEM
The Master of Engineering with a concentration in Information Engineering Management (IEM) at the University of Alabama at Birmingham (UAB) is a specialized concentration designed primarily for engineers and people in technical positions. The concentration presents business systems and soft skills in a curriculum that is based on actual engineering industry needs and is offered completely online.