facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast blog search brokercheck brokercheck
%POST_TITLE% Thumbnail

Goal Setting During Financial Wellness Month

January is Financial Wellness month, but what does financial wellness mean to you? For some of us, it might mean getting a better grip on our budget. For others, it might just be about getting organized. Maybe for some, it’s about setting goals and establishing a plan to save towards those goals. 

Here are three things you can do this month to truly focus on your financial wellness:

Write Down Your Financial Goals

We all know that if you write down your goals, you’re exponentially more likely to achieve them. And if you need the motivation to sit down and to do this review of your finances this month, there really is no better starting place. Because, how do you properly evaluate how you’re doing, if you aren’t even sure what you’re working toward? The reality is that most people have an idea of what they want in their minds, but they just haven’t taken the time to truly evaluate them. So take a moment to write down your various goals and be sure to quantify them – How much is this goal going to cost? And what is the timing of this goal? For example, I want to retire at age X with $X amount in savings or I want to do a home renovation in year X that’ll cost $X amount. Whatever it is for you, take the time to write it down. This will become the foundation for evaluating the rest of your finances. 

Update Your Net Worth Statement

Your Net Worth is merely a calculation of your Assets minus your Liabilities. Your Assets include everything from your investment accounts, to your retirement accounts/plans, bank accounts, annuities, real estate properties, business ownership, etc. Your Liabilities include any mortgages, car loans, student loans, notes payable, line of credits, or other debts. Grab the most recent statements for all your assets and liabilities. Then add up the current market value of your Assets and subtract from that the current market value of all your Liabilities – That is your Net Worth. The purpose of this exercise is partially to get organized so you’re aware of what Assets and Liabilities you own, but it’s also about taking record of what your Net Worth is so you can track it. Your Net Worth is just a snapshot in time. It will fluctuate over time, but generally speaking the goal is to increase your Net Worth over the long-term. That is to say, pay off your Liabilities and increase your Assets.

Review Your Cash Flow

Take a look at your most recent pay stub or other statements and take note of all your earnings and income in 2018, net of taxes. Then take a look at what you saved to any investment, retirement, or bank accounts. This might seem obvious, but essentially anything that was not saved was spent in 2018. If that total spending number seems unreasonable or doesn’t allow you to save toward any of your other financial goals, then maybe it’s time to do a full budget or at least a review of your credit card and bank statements from the past 6 months. This way you’ll be more aware of your true spending habits and can make adjustments as needed. From our experience, many people (no matter what their financial situation looks like) feel guilt about their spending. It doesn’t mean everyone needs to be on a budget at all times. If you do this review and find that you’re still saving toward all your accounts and goals like you want to, then keep doing what you’re doing. Alternatively, if you do this review and find you’re off track when it comes to your savings goals, then maybe it’s time to roll your sleeves up and to do a real budget. 

Keep in mind that financial wellness isn’t just about the quantitative side of getting your finances in order, it’s also about the qualitative side of things in allowing you to feel good about your finances and empowered by money. It’s about ridding yourself of the discomfort and concern around money discussions, and feeling aware of your financial situation and like you’re on track to achieve your goals. So this month, take time to focus on your own mental and financial wellness with these three things.