Now is a great time to take a snapshot of your finances and make sure you’re spending your family’s money wisely. Here are some things you should check when completing a personal financial review.
Do you know how much you spent at your last trip to the grocery store? Or, are you finding yourself taking the whole family out to eat all the time?
Food is one of the top three expenses in America, right after transportation and housing. The average citizen spends close to $7,000 on it a year – that’s a whole lot of late-night Taco Bell and Saturday morning green juices.
Seriously though, you need to have an idea of where all the money you work hard to earn is actually going. Think back to your financial goals at the beginning of the year. Maybe you said 2018 was the time to finally pay off your student loans or get a handle on your credit card debt.
Well, we’re halfway through. How are those goals going? Use the following spending categories to help you conduct a personal financial review and assess your progress.
Basic Living Expenses
You should always take care of yourself and your family first. This means all the money you make should go into living expenses, then everything else.
Living costs break down into your home, meals, and health, as well as the wellness of your pets and necessary items like car and insurance payments.
Your Home, Your Meals, and Your Health
Take a close look at how well you’re sticking to your living budget. Chances are, if you’re eating out all the time or buying everything organic at the store, you’re spending more than you need to be.
Find ways to cut down your energy costs at home, too. Educate your children on the value of shutting all the doors and windows for airflow, and pay attention to how your water bill reacts to all the loads of laundry and bathtimes in the home as well.
This doesn’t mean you have to compromise your wellbeing or move to a smaller home. It just means you should be smart about how you budget for these basic necessities.
Pet Expenses, Car Payments, and More
Don’t forget to include your dog’s vet check-ups in your yearly budget, just like you would your kid’s braces or your husbands prescription. Factor in car payments and the insurance for each vehicle, too.
These are things you’re going to be spending money on regularly, so you need to know where the money will be coming from.
Your Savings Fund and Credit Score
Speaking of knowing where your money is coming from, how are your savings doing? You should always be making more than what you spend.
This allows you to have a consistent stream of money to set aside for emergencies, a new home, or a college fund. Your savings goals will depend on the immediate needs of the family and the wiggle room the rest of your budget allows.
Try to prioritize getting out of debt over having fun with your finances, though. Check your credit score, pay off any loans you still have, and find ways to make your money work for you, like opening an HSBC credit card and building points on it.
Using a Regular Personal Financial Review to Create Financial Freedom
The better you get at spending and saving responsibly for the things mentioned above, the more money you’ll have for miscellaneous spending. This is how you can start to build a travel fund for a family vacation every year or maybe set yourself up to buy another pet or a new home.
Whatever your definition of financial freedom is, always remember it’s attainable! You just have to make a few sacrifices and stick to your budget with the help of a personal financial review. The rest will come.
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