This blog was inspired by Charlotte Darr with Save Live Thrive who posted about spring cleaning your finances and I thought, yes – brilliant.
We all make big plans at the beginning of the year, make all sorts of new years resolutions that many of us will ultimately ignore or throw out the window by the next month.
Financial goals are among this list of ignored new years resolutions. So instead of waiting until next year to start another unresolved financial resolution – why don’t we try to pick up where we left off and start again NOW and not 6 months from now.
Spring cleaning is something I look forward to when the weather gets nicer. There is nothing better than packing away those winter coats and boots and saying helllooo to the bathing suits, summer gear and flip flops! Windows are down – fresh air is finally entering the house and you hear the birds chirping right outside your window in the morning. Love it.
But aside from getting the house ready for the next season, let’s also consider the importance of spring cleaning our financial lives as well.
Keep all of your financial documentation in one central location so that it is easily referenced in the future when you need it. There is nothing worse than needing to reference a number, a transaction or a bill and spending 20 minutes trying to find it to ultimately give up and claim that you will “look into it later.”
Whether your financial documents are saved in an email or on paper in the filing cabinet- ensure they are all organized in a secure location that you can easily reference in the future.
Please also update these forms on a semi-annual basis so that you remain up to date but also aware of any changes.
Your net worth equals your assets less your liabilities. So everything you OWN less anything you OWE.
Your net worth is the key indicator of your overall financial health and will be imperative for you to continually track on an ongoing basis. This will allow you to see your financial progress over time.
Being able to visualize it, understand what is driving it and identify where you really stand is an invaluable tool to motivate you and help you take the necessary steps to move forward.
Download a free copy of my net worth template for you to review your net worth.
One of the foundational tools in building wealth and structure around our financial lives is by having a clear understanding of what money is coming in and where money is going out.
Take a look at the last 30-60 days worth of spending and identify what money came in and categorize how the money was spent. Review your expenses to identify if they align with your goals and if they are truly adding value to your life.
Build awareness around your spending habits – it is one of the few ways for you to get a clear understanding of what changes need to be made.
After reviewing your spending, take a look at or a create your budget. Get an understanding of the way you spent and start creating buckets in which you identify exactly where you want your money to go.
Or perhaps you have a budget, ensure that it continues to be appropriate for you. Do you have all the categories necessary for you? Do you need to make any minor shifts for the remainder of the year? Now is the time to take a look.
You should be in control of where your money goes – not the other way around. Creating and sticking to a budget will help you take on that ownership of your spending.
Understand what you are trying to achieve and create short term goals. Contributing X amount per month to your retirement account or X amount to your emergency fund, etc. Whatever it is, identify the goal and automate the process.
The process of automation is critical as it will eliminate the continual decision making or temptation to switch gears.
If you are looking for a way to help guide you in overcoming some of these financial hurdles and aren’t sure where to start – please refer to the FinPowered Personal Wealth Tracker.
The Wealth Tracker is a 4-1 template designed to help you take ownership of your financial life through cash flow planning, budgeting, understanding your net worth and establishing financial goals.
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