It’s time for a financial wellness check: Part 2
Start the year by checking the health of your finances.
The financial component of saving was discussed in the first part of this three part series on financial wellness. The second part will cover spending. Do you plan your purchases or buy on impulse? Do you really know how much you are spending on needs and wants?
Make a list of monthly expenses. Include everything from mortgage or rent payments, insurance or tax payments, to groceries and gifts. This list should be all inclusive. If you spend money on a particular item on an annual or semi-monthly basis, then divide the total amount of the item by 12. This will provide a monthly amount for you to add to the list. Next, calculate the amount of money that you take in on a monthly basis. This should include earnings, alimony, child support, cash assistance, food assistance or social security and disability.
Compare your monthly income to your expenses. Are you on the plus side or do changes need to be made? There are steps to take if you do not feel financially healthy in this area.
Find a way to track your spending. Record purchases on your phone, write them down, or collect receipts. Do this for at least two weeks, then add them up. Review how you have spent your money. Are there any changes that can be made?
What about the expenses that are automatically being deducted from your checking account. Have you let them continue on auto-pilot, without much thought? It may be time to end these deductions, if the purchased services or items are no longer needed.
Are you paying for services that you may already have? It’s possible if you have purchased extended warranty or credit monitoring services. Check with your credit card company, cell phone carrier, financial institution and insurance company to see what benefits are included with their products.
The third article of this three part series will cover the importance of risk management in protecting your assets and personal information.
Michigan State University educators invite you assess your financial health and visit Michigan State University Extension. In addition, Michigan State University offers money management and homeownership classes. For more information about classes offered in your area visit MI Money Health.