Wellness Checks. We’re constantly reminded of the importance of getting one. It is a preventative action that normally takes little time and effort to complete. The resulting peace of mind usually outweighs the dread of visiting your health care provider. There are times when you find yourself inventing at least a dozen excuses for putting it off for another month and then another… By putting it off, your routine check-up may suddenly become an emergency!
Our fear of knowing, feeds our habit of not wanting to know. How many times have we said to ourselves, “If I had only known!”
Granted, not all crises can be averted but a little knowledge and good management practices can go a long way in helping us maintain consistent financial peace of mind.
• Create: A financial chore list including short-term and long-term goals. Are they realistic, sustainable and achievable? Prioritize- begin with small steps at first. “Divide and conquer”, is the order of the day! Get a trusted family member or friend to help you devise a system or simply begin the process by organizing the pile of papers on your desk or counter: ones to keep, ones to file and ones to throw away. Plan on doing this at least one time each week. Once you know what you have, you can begin to take control over your fear of finances.
• Calculate: The monthly income of all household residents. List monthly expenditures and due dates. Remember that some bills arrive quarterly or even annually such as insurance premiums, property taxes, license plates, etc. Separate into “Needs/Wants”. What is essential to your family’s wellness? What costs are fixed (mortgage, rent, loan payment, etc.? What are your monthly flexible costs (utilities, food, gas, etc.)? What costs can be reduced? A helpful monthly spending plan worksheet is available from MSU Extension Mont-Guide; Developing a Spending Plan by Dr. Marsha Goetting, Kerri Hayes, and Joel Schumacher- http://www.msuextension.org
Estimate total debt-loans, credit cards, taxes and mortgage. Come up with a feasible plan for reducing and paying off debt-winning the lottery is not one of those, however! Your disposable income is what you have left after your income is subtracted from your taxes…then it’s a good time for a family discussion.
• Cut and paste: Seek input from those who will be impacted by the planned life-style revisions. It’s a good time to talk about long-term goals (vacations, a new car, paying off debt, etc.) that may be reached by making the necessary changes and sacrifices now. Revisions can be made as circumstances dictate. Our priorities often become “not so priority” when we’ve taken a good hard look at the long-term cost involved.
• Concentrate on crisis management: Emergency funds need to be in place for emergencies, right? How often do we use emergency funds for non-emergencies? It’s very important to differentiate between the two within your family.
Emergency funds typically cover three to six months of living expenses and once you know what those are, you can start diverting some monthly income, no matter how small, into an ear-marked savings account. Put aside a set amount to pay down debt. Unanticipated career/job or housing changes may necessitate the need for seeking professional financial advice or assistance, however.
• Celebrate: Your efforts on becoming a financial wizard! You’ve done some magic on your financial confidence and you are no longer as intimidated by your financial ineptness. Completing your financial wellness check may make you aware of some needed repairs and adjustments. Being consistently proactive, rather than reactive, puts you in the driver’s seat as you navigate life’s changes and challenges.
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