April is upon us. No foolin! That means the first quarter of 2019 is done. I hope you’ve progressed as time passed.
To look ahead, I’ve come up with a few goals that might be worthy of adding to your list for the second quarter.
Reflect on Q1 and keep what worked well.
- What goals did I have the last quarter?
- What did I accomplish?
- What specific things helped me achieve those goals? What works for me? (habit tracking, affirmations)
- What has held me back from reaching some goals?
- How I can I overcome those obstacles in the next quarter?
- What can I do specifically in the next quarter to get closer to my goals? (daily, weekly, monthly)
- How will I measure success? (the amount of debt paid off, number of times I exercised per week)
- What expenses should I plan for in the next quarter?
- How can I monetize my gifts and talents?
Take a look at the Ultimate Goal-Setting Checklist for guidance on crafting new targets.
Evaluate where you are in terms of annual goals and list the next, best steps.
Go back and look at the big picture. Have you reached 25% of your debt payoff goal as planned? Did you earn an extra $300 each month in the first quarter? Be intentional with the next 3 months to make sure you’ll be in a better position and proud of yourself in December.
Save 1 Monthly Nut or 1 Month of Expenses.
If we’ve learned anything from the U.S. government shutdown, it’s that we need savings. We don’t want to be 1 paycheck away from not feeding our kids, eviction or car repossession.
The monthly nut is how much do you need each month to cover your ongoing monthly obligations. This doesn’t include extras like eating out. The things you have to pay for each month include groceries, rent/mortgage, utilities, phone bill, transportation, healthcare expenses, membership dues, insurance premiums and debt payments.
Knowing your monthly nut helps you determine how much you should save in an emergency fund or Sunny Day Fund, as I call it.
You could go a step further and get 1 month’s worth of true expenses. That’s the Monthly Nut and all of the extras you pay for (gym memberships, movie night, eating out, etc.). It’s highly recommended to eventually have a few monthly nuts or months’ of expenses saved.
Knowing your monthly nut or 1 month’s worth of expenses will also help you audit your bills. The goal is to keep the number of bills low and each amount low. The bigger the gap between your expenses and income, the better.
If you make $4,000 and your monthly nut is $1,600, then you’ve got $2,400 to use for paying down debt, traveling, underwater basketweaving, saving or investing. What if you discover that your nut is over or close to your take-home pay? The answer: Believe that you can widen that gap, cut spending and start making more money.
You need a place to stay, but you don’t have to stay in the spot with the highest rent in the city.
You might love that Purrfection Cat Magazine subscription, but do you really need it? (I just made that up… I think).
You need food, but you don’t need to eat out every day.
Call your utility providers and ask for discounts or promotions. Give up cable. Move in with someone or get a roommate so you can split bills. Move to a cheaper place.
Work overtime. Earn a promotion. Sell items you don’t need at a yard sale or online. Get a second job. FYI: You don’t have to do all of these things at once. Personal finance is personal.
Start a sinking fund for an event in the future.
A sinking fund is savings you expect to use for non-emergencies or irregular expenses (i.e. car repairs, vacations, Christmas gift purchases, etc). If you listed important dates and holidays you plan to celebrate in 2019, then you can guesstimate how much you need for each event. Then reverse engineer your savings goal.
If you get paid the 1st of each month and want to start saving $3,000 in April for a vacation in mid-September, then calculate $2,000/6 pay periods. You need to save $334 each month.
Follow the same steps in this blog post to open up a savings account SEPARATE from your main checking account so you don’t dip into your vacation or Christmas fund. Sinking funds work wonders.
Get all of your financial documents in one, safe place.
This is a daunting task at first. But folks like David Bach, the author of The Automatic Millionaire, have listed everything you need to collect and instructions on how to store it. Download this document from David Bach and follow Step 4: Find Your Stuff to get your $hit together.
After reading Bachs’ and Patrice C. Washington’s book, I got on the ball. Moving to China was another motivating factor. I wanted to leave my affairs in order in the States and leave my mom with everything she’d ever need in case something went down.
Create or update your will.
A friend who had already left for China put me onto the estate planning services through the State Employees’ Credit Union in North Carolina. I was going halfway around the world. A will seemed extra necessary. I was moonlighting at a local community college, so I qualified to join the credit union.
For a flat fee of $275, the credit union set me up with a law firm. An attorney sent me a list of questions via email to review and I met her at a local branch of the credit union within a few days. Here are some items from the estate planning questionnaire:
- Do you have long-term care insurance?
- “…please explain in your own words who you want to benefit from your estate when you pass away. (For example, “All of my estate goes to my children in a trust.”)
- Would you like a Power of Attorney? (A Power of Attorney enables another person to manage your financial affairs when you are not able to do so.)
- Would you like a Health Care Power of Attorney? (A Health Care Power of Attorney enables another person to make health care decisions for you when you are not able to do so.)
At 29, I really didn’t want to have to answer those questions. But I did. It’s better to be safe than sorry. Check your local resources to see how to create your will, if you’re doing it for the first time.