We love Giving Tuesday and all the generous activities that come with this special holiday – investment advisors paying off layaway bills for their clients, communities donating time and money to those in need, large companies donating their proceeds to charities. It’s a day to think of others and how to help them out.
In the spirit of giving, we’d like to help YOU by reminding you that your financial health depends on you giving time to yourself, your dreams, your income, and your expenses.
Spending a little bit of time every week reviewing your spending will go a long way to making you more financially healthy. People with good financial health are like people with good physical health, they take the time to focus on making themselves healthy.
Things to review each month:
1. Were my bill(s) paid correctly?
Did I pay my bills on time? Do I know how much I paid? Some people sit down once a month to pay bills while others have their bills paid automatically. Either way works, but those who pay automatically often don’t take the time to review their finances at all. Make sure you do!
2. How is my checking account balance looking?
Do I have enough for next month? Do I need to cut back? Do I have a little extra to put into investing so my money starts working for me?
3. What bills are being paid next month?
How much do I expect them to be? Am I prepared? Do I need to change my day to day spending to cover the big bills coming? Am I saving for future expenses like insurance every 6 months, a car in four years, being financially independent at some point in the future?
And once a year, take a look at your big picture. How much money are you spending? Look at the outflow on your checking account balance AND look at the growth in your credit card balances. Add them together and that’s how much is flowing out.
Keep track of the monthly inflows and outflows.
If you see that more is flowing in, that’s great! Go one step further and look at how much you’re investing in your future. Do you have an emergency fund? An opportunity fund to go to the wedding or visit the friend that moved to India for a year? Are you accumulating wealth that will allow your investments to pay your paycheck one day and give you the freedom to choose not to work for someone else if you want?
If more money is flowing out, oops! Where are your big expenses? Housing? Car payments/repairs? Eating out? You can make a huge impact by having a roommate or becoming a roommate or moving to a smaller apartment or cheaper area. And just because you MADE a decision about that car doesn’t mean you can’t change your mind. Even if it costs you more in the short term, if it saves big bucks in the long term it’s more than worth it.
Before giving money on Giving Tuesday, make sure you give yourself the time to be financially healthy, the money to invest in your future, and then give what you can afford to others and feel good that you didn’t bust your budget doing it. And maybe that means giving your time volunteering at a charity instead of giving money. Time is precious and very much needed at charitable organizations! Just remember, whatever you give will be appreciated!
Happiest of Giving Tuesdays from team SBFP!