Essential Personal
Finance Activities
Written by: Leandra, Elise, and the Flowering Financial Team
So, it looks like we will be at home for all of April.
How strange. To be living in a time of quarantine. I’ve been working hard to reframe this experience, this mandated time at home, and show gratitude for the opportunity to become present in each part of my day. It can be so easy to get caught up in the hustle of life, that we forget to experience each moment as it is happening. We are too worried about the past or the future, but never right now.
Some days at home have been and will continue to be hard. We absolutely want to do nothing, and that’s okay. Watching Netflix, taking naps + really hot showers are all forms of caring for ourselves in a time of uncertainty and sickness. Each part of this process is important as long as they are met with intention and presence, and if you’ve read and slept and bathed and watched and danced and sang and you want to keep boredom at bay, here are five essential + easy personal finance activities.
1.Make (or Revamp) Your Budget
If lack of free time stopped you from creating a realistic budget in the past, I totally understand. It can be a lot, but you’ll have a lot of time at home in April, and as a financial planner, I’d be remiss if I didn’t invite you to create a budget that works for you and your family! Take your time and first establish what you are currently spending by reviewing the last three months of bank statements. Use your current spending information to establish your budgeting targets (your monthly goals in each category). Then enter those targets into a budget tracking tool like Mint.com, link up your bank accounts, and let the software do the work for you. Monitor. Adjust. Repeat. Remember less is more when making changes to your budget. Be realistic, and take care of yourself. It’s a process and you are learning. Be supportive and make changes when necessary without beating yourself up.
2. Calculate Your Net Worth
If you’ve ever taken an accounting or intro to business course, you might remember the most universal accounting formula of all:
Assets MINUS Liabilities EQUALS Net Worth
If you haven’t, that’s okay too. While this is a concept found in the corporate world, it applies to people, too. Assets are things you own: a home, a car, a 401(k). Liabilities are amounts you owe to others, like your mortgage and credit cards. The difference between those two is net worth. Your net worth is a great indicator of financial progress. As you pay off debts, and expand your investments, your net worth increases, too. Each year we grow older, working towards retirement, with the hopes that each year our net worth grows too. Calculate yours to see where you stand. Repeat in six months and see what’s changed! By just becoming aware of yours, you will be more conscious of your spending habits and goals for your future. It’s how we succeed in any facet of our lives.
3. Insurance Shop
I always recommend my clients shop for new property and casualty insurance every few years. Rates change over time and the way in which insurance companies calculate rates change, too. If you’ve been with the same insurer for years and don’t want to end that relationship, that’s okay! But shopping around and finding a better rate elsewhere can be an excellent negotiation tool with your current insurer. Ask them what they can do. We think you’ll be surprised. It takes a little time, but who are we kidding, we have plenty + love to save money!
4. Create A Debt Repayment Strategy
Outstanding bills from holiday spending? Student loan payments stressing you out? Why not use this time to establish a plan to pay off debt that’s holding you back from achieving bigger, better financial goals? Gather your bills and do your research on common debt repayment strategies like the snowball or avalanche method. We can assure you it’s time well spent.
5. Set Financial Goals (SMART ones)
Did you set some financial resolutions back in January? Did you stick to them? Do they need a little conscious care? Right now might be a great opportunity to sift through the chaos, regroup, and plan for the remaining year ahead. Just keep in mind that financial goals are most effective when they are SMART. Specific. Measurable. Attainable. Relevant. Time-Based. So instead of writing, ‘I will save more this year’ in your bullet journal, say ‘I will set aside $300 per pay period for 12 months to establish my emergency fund’. And yes, you’ll be well on your way to doing just that because you wrote it down + were very specific. You’re great!
I know that as we all try to process this unprecedented time in history, it can be really hard to find your normal. I just wanted to offer up my knowledge + expertise for those days when you are feeling good, when you are able to be thankful for the opportunity of time. To focus and define and create the life you want. We’re all in this together. Breathe.