Financial Check-Up: Where are you now?

Hi guys! To get a good foundation on our finances, we need to do one more important thing: a check-up. Yep, your finances need to have check-ups too. One thing that was very apparent in 2020 was that the vast majority of us were not in good financial health, and a lot of people are still feeling those affects. Incomes have changed, living situations have changed, and for many families, medical expenses have changed as well. I think most people genuinely want to get a good handle on their financial situations but just don’t know where to start.

Tell me if any of these sound familiar: “It’d be great to have more money saved right now.” “I hope this holds out a little longer – the last thing I need is for it to break down right now.” “I want to make a budget, but don’t know how much should I set aside for everything.” “I just got paid but feel like my money was spent in two days.” Yea… I’ve said those too.

All is not lost! Getting control of your finances is not impossible. It’s easier than you think to put into practice. It just takes consistency and focus. (Did you figure out your ‘why’ last week?) The next step toward moving forward though, is to understand exactly where you are right now.

Do you know how much you’re really spending?

This is why regular financial check-ups are important. Where you think you are may not be where you actually are. Taking some time to look at what you’re actually doing right now, before changing any habit, will help show you where you need to make adjustments to reach your financial goal and how much those adjustments should be. After all, how do you know what needs to change if you don’t understand what you’re doing?

OK guys, let’s start this check-up. Let’s figure out EXACTLY where you are with your finances. You know how much comes in – your paystub shows you that. But exactly how much is going out, and where is it going? We need to get to the point where you’re telling your money where to go, not wondering where it went.

How much do you spend on your bills every month? How much do you spend on everything else?

Are you in debt? How much do you owe?

Do you have a savings account? How much do you have saved right now? Do you have a fully-funded emergency fund?

Take the time to write down EVERYTHING. Get a snapshot of exactly where you are with your finances right now. Since our spending can fluctuate a little month-to-month depending on what we need, look at 3 months’ worth of spending then take an average. If you save receipts, pull the last 3 months of receipts and write everything down in one place. If you don’t have all of those receipts saved, you need to write down everything you spend money on for the next 3 months. EVERYTHING. Now, don’t change anything in your spending habits. Carry on as usual – just make a note of every dollar you spend. The point is to get an understanding of what your spending habits are right now. Then, it will be easier to figure out what needs to be adjusted, if anything, to help you reach your goals.

Remember, this is a marathon, not a sprint.

And don’t feel bad! I was shocked when I went through this process too. I didn’t realize I was spending as much as I was on the things that I was until after I saw it all written down in one place. The point is to understand what your spending habits are right now.

Are you ready? Be consistent and write it all down. This check-up will be your foundation for lasting debt freedom and financial success.

You got this!