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There is a lot to be aware of and learn about in the area of managing our money. Some of us were not taught much beyond the basics and we need to acquire the skills to take charge and manage our finances. Maybe you need a blueprint to help get started or you just want to make improvements on what you are already doing.
Having a money checklist is a great way to keep focused so you can stay on track with your financial goals. A checklist also allows you to monitor your progress and assess where you are doing well and identify areas where improvement is needed.
The money checklist is intended to help you develop and maintain the right financial management habits. If you want to take control of your financial situation and make improvements you can do it. We will provide action steps you can use to help create a money management plan. But like creating any habit, you have to first decide to take the first step; then practice, practice, practice!
Table of Contents
Review and Plan Goals
The first phase of a money checklist is to create your financial goals. After you review your financial goals and where to allocate your money, you then can begin to create a budget. With the income you have designated, a budget makes it easier to focus on the areas where you will save, spend, and determine which expenses to adjust or eliminate.
Once the budget is designed, you now have a tool to track your expenses. You can use this to review where the income is spent and then monitor monthly how the money in your family is distributed. It is truly the foundation of financial well-being. This allows you to ensure dollars are allocated to the best place. If you are spending $150 a month on coffee beverages, can those dollars be better used for the family savings plan?
A budget provides you with an effective instrument to manage your spending and analyze your expenses. It creates an action plan for reviewing your financial goals and putting your savings in place for the year. The budgeting process done consistently over time will increase your chances of achieving your goals.
Identify Ways to Cut Spending
An important part of money management is identifying ways to reduce spending and save money. Trying just a few of the following ideas can end up saving you hundreds of dollars over time. Also, don’t feel like you need to implement everything at once. Start with one or two a month and add on each month until you become a super saver!
Look for ways to reduce your energy bills such as using a programmable thermostat and switching from incandescent or CFL light bulbs to LED bulbs as the old ones burn out.
Cut the Cable Cord
Eliminate the cable altogether and go with an antenna for live television and a streaming service (such as Netflix) for more options. Don’t want to add a streaming plan? There are other great alternatives.
Buy, Don’t Lease your Car
The most affordable way to own a car is to buy a vehicle and drive it for several years after you pay it off. The longer you drive it, the less it costs.
Consider a pay as you go cell phone or a low data package to cut costs. Also, evaluate if you still need a landline anymore.
Look for free concerts in the park or discounted days at local museums.
Give yourself a mani and pedi at home or do a root touch up with hair color from the beauty supply store.
Instead of going out, have friends over and ask them to bring a dish to share. It is always less expensive to have food and drinks at home.
Evaluate Retirement and Savings Plans
It is very important to plan for the future. This can be challenging because there is not instant gratification and you don’t always experience the reward right away. However, it is something that shouldn’t be delayed or overlooked because the sooner you start saving the more time your savings can grow. There are many options to include in your overall savings and retirement planning.
If your employer offers a 401K match, this is a great way to reduce your taxable income and begin saving for retirement. If your company doesn’t match a 401K contribution, the next best option is to open a Traditional IRA (Individual Retirement Account) or Roth IRA.
You may have to save money for college or vocational school for your children. Depending on where you live, there are savings plans available, such as a 529 plan. These vehicles allow you to maximize contributions by putting money away tax-free.
Other investment areas to consider planning for in retirement include:
- whole life insurance
- mutual funds and stocks
You can use a savings account at your bank to start your savings plan. For as little as $100, you can open up an account and begin adding funds from your monthly budget. Having cash in your account for an emergency or an unexpected bill is so important to have as a part of your savings plan. That rainy day fund will be necessary some day and you will be glad you have the funds available.
Schedule and Review Bill Payments
As you use a budget to review and track expenses, developing a system to schedule and review bill payments is just as important. Paying your bills on time impacts many other areas of your finances including credit scores, approval for credit cards, applying for a home or auto loan and other purchases.
There are a variety of ways to schedule your bill payments. You can have them automatically sent from your checking account on specific dates or you can write dates on a calendar as reminders for when they are due. The key to properly paying on time is to have a system and put in place so you can revisit it each month. You don’t want to look for the bills you receive or try to think about when you have to pay them.
If you do use credit cards, try using only one or two cards that earn points or cash back. This will decrease the number of statements you receive and have to keep track of. Another part of bill paying is to create a filing system to store statements and bills. This way you can easily review them monthly and make sure no incorrect charges are included and track what you spend on items.
An organized plan to pay bills helps to eliminate missed payments and track spending for a specific category. Although this task can be a burden at times, it is an essential component of supporting your overall budget.
Check Your Credit Score
Maintaining a high credit score is very important to qualify for the lowest interest rates, which saves you money. You will want to check your credit reports and credit score on a monthly basis if possible. This way you can find any issues or errors and dispute them if needed. You can also catch identity theft early as this can wreak havoc on your credit score. I was fortunate to have credit card monitoring in place as I was a victim of identity theft. I received an email from the service about an inquiry on a credit card someone was trying to open in my name. I called right away and the credit card account was never even opened because I found out so quickly and could take immediate action. Your bank may offer credit card monitoring for a much lower price than other providers. You will want to make sure that the provider you choose offers 3 bureau credit monitoring for Experian, Equifax, and Transunion. It is worth paying a few more dollars for this so you are protected. Many credit card companies or less expensive monitoring services only monitor one bureau which won’t help you if something happens on the other two. You can also get free credit reports once a year and just pull one report from each bureau every 4 months. That way you are not letting an entire year go by without checking and can at least review on a quarterly basis.
Continue to Gain Financial Knowledge
Become a lifelong learner and continually improve your financial literacy. Things change over time so you want to stay up and current on the various topics. Life changes can impact your financial decisions and needs. Getting married or divorced, retiring, having a child, or starting a new job, may require you to make adjustments to your money management plan and goals.
Increase your knowledge about areas such as investing, insurance, retirement, taxes, and social security. It takes time to learn about all the different areas that will affect your financial management. Start to tackle one subject at a time. Here are several ideas to help you improve your financial knowledge:
- Listen to podcasts/watch videos
- Check out Pinterest
- Read books
- Subscribe to online magazines and newspapers
- Get advice from others who are financially sound
- Take a class
Looking Toward the Future
Developing and using a money checklist is going to require you to get into a routine. For the first year we recommend reviewing your plan monthly. During the second year and beyond, a quarterly review should be sufficient. Unless you experience a major life change which will impact your financial management plan.
You will want to monitor the goals and progress you achieve. Next, set new goals as you achieve your current ones. Remember that money management is a journey and process that will evolve and develop over time. The important point is to take small steps on a regular basis and to develop the habit of managing your money. Having and using a money checklist will give you and your family a solid foundation to come out ahead with your finances!
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