Give yourself a financial check-up
Pop quiz: How much cash do you spend each month?
You may think you know the answer, but do you really? Here’s why I ask: Last month a friend of mine went to see a financial planner. Before the meeting, she had to fill out a form, and that was one of the questions. She almost wrote down “$200” without even checking her statements, because she hardly ever uses cash and mostly relies on plastic (despite my frequent reminders that you spend less if you use cash). She was sure she only used cash for things like coffee and cabs.
Turns out she must be taking a lot of cabs.
A quick glance at her online bank account revealed that she actually spent closer to $600 each month. In other words, she was blowing through $600 a month and had no idea where it was going. Over the course of a year, that’s about $5,000 of her hard-earned money, totally unaccounted for.
Another shocker was how much money she was spending on restaurants each month. (She was too embarrassed to tell me the figure, but assured me that it was equivalent to rent in many U.S. cities.)
The point is: You can do a lot with your money. But not if you’re out of control of it.
So, please do yourself a favor and check in on your spending each season. You don’t need the excuse of an upcoming visit to a financial planner to give yourself a fall midterm review. And even if you’ve done this exercise in the past, it’s worth repeating a few times a year because habits change.
All you have to do is notice patterns. Are you spending your disposable income, if you have it, on the things that are the most important to you? Are you saving for your dreams? If not, are there areas where you can cut back? The results might surprise you.
If you learn anything new and surprising from doing this, drop me a line. I’d love to hear from you!