Spending extra time in my home this year has both added and decreased the to do list. For a few months I tackled removing old dated wallpaper with the help of YouTube and lots of extra time. Another project, learning to knit a sweater……hoping for the cold weather now! In the midst of a few other projects I’ve tackled has been compiling my Financial Inventory. For those of us with retail experience the word “inventory” conjures up endless counting and long hours. This one is much easier!
It is a great first step to getting your financial house in order, whatever life stage you’re in. If you’re newly single it allows you the chance to reset, start gaining confidence, and begin taking control of your money. You can do your list with something as simple as paper and pen or a fancy spreadsheet. Your choice!
List all your monthly household income and expenses. You should know how much money you have coming in each month. List all salaries, income from side hustles, distributions from Social Security or retirement, along with any other monthly payments you may be receiving.
List all your fixed costs and monthly loan obligations. For example, mortgage, auto or student loans. Also, include lender’s name, the current interest rate you’re paying, remaining months or years on the loan, and outstanding balance.
List all discretionary expenses or as we sometimes refer to as non-essentials. These are items like streaming subscriptions, cable, gym/fitness memberships, and restaurants.
Next, list all accounts that hold your money. Include bank accounts (checking & savings), investment accounts, and retirement accounts.
Then list any other assets you may own. Perhaps you have rental or vacation property, life insurance policies, annuities or art collections.
If you’re an employee, review all of the benefits you have such as health & disability insurance, 401K matches, tuition benefits including continuing education, and membership discounts. Also, review a recent pay stub to see the tax amount being withheld from your paycheck.
Last and certainly not least! List any important documents you have and where they’re located. Your will, personal letter of instruction, and medical directives, etc. If these copies are kept at your bank in a safe deposit box you may want an extra set in your home safe. Just in case you need access during a time the bank is closed.
With this information, you will have an all-around snapshot of your financial picture so you can make whatever changes you want for the upcoming year. Analyze your monthly budget to determine if you need to adjust the amount you’re saving or investing. Does it make sense to refinance a loan for a lower interest rate? Identify any employee benefits you’re not taking advantage of along with adjusting your tax withholding. Understand what estate planning documents you do have and perhaps either need to update or add.
It’s all about knowing where you are right now so you can make the best possible decisions about your money moving forward. Creating Your Financial Inventory is a great foundational first step. Need help with your money questions and spending? Schedule a no-obligation Q&A session with me today here!