Creating a Financial To-Do List
Dealing with your personal finances probably always seems like a chore to you, because of this we can guess that you never quite give your finances the attention they need. Its human nature, we do the things we actually want to do first and then maybe if we have a few spare minutes we tackle one or two items on our never-ending to-do lists. We don’t blame you if creating a budget, sorting through bills and dealing with debt are always on your list but never ever get done.
Since your daily to-do list is probably so long it doesn’t fit on one page we want you to create another list, one that’s solely dedicated to your finances. This way you can separate the mundane tasks like doing the dishes from the important tasks like, paying your bills. Your financial to-do list should be catered to your income, your expenses, and your goals. You can include whatever you want but we suggest including everything, from tracking your spending to saving for your retirement. Here are a few items that you should consider adding to your financial to-do list:
1. Track Your Spending/ Save Receipts
If you often find yourself broke by the end of the month and have no idea how you got there you need to start saving your receipts and tracking your spending. Doing this for even a short period of time will prove to be eye-opening, especially when you realize you’ve been spending 50 plus dollars on coffee every week for the past year.
Once you have a better understanding of where all your hard earned money is going every month you can figure out where and how to cut back.
2. Create a Spending Plan
Now that you’ve tracked your spending you can create a plan of action to cut back and start saving. Technically this is your budget so create spending categories and then allot a certain amount of money for each category, having a specific amount you can spend will hopefully allow you to stay within your budget and not over spend on things you don’t need.
3. Complete a Net worth Statement
This step depends on where you are in your life, so if you live in an apartment and don’t own any assets right now you can probably skip this step (but come back to this step once your financial life has developed a bit more). Make a list of all your assets then make a list of all your debts. Subtract your debts from assets to find out what your net worth is.
4. Get a Copy of your Credit Report, Including your Credit Score
This is relatively self-explanatory; simply request a copy of your credit report from one of the two major credit bureaus, Equifax or TransUnion. Make sure you also request your credit score as it’s not included in your credit report, you’ll probably have to pay extra for it.
5. Cut Your Spending by 10%
Technically you can cut your spending by however much you want but starting with 10% is a great first step towards meeting whatever financial goals you’ve set for yourself.
6. Start an Emergency Fund
This is probably the number one most spoken bout piece of financial advice and there is a reason for that, because having an emergency fund is almost priceless. What we mean by this is that being financial prepared is so valuable, a lot of emergencies can be fixed with money so when your car breaks down in the middle of winter you’ll have and cash available to call a tow truck immediately.
7. Start a Savings Account
This account should be separate from your emergency fund (or if you’re looking to streamline your finances it can be the same account, it’s up to you). This money should be for the future, whatever that entails for you. So it could be for retirement or for a vacation or for your dream home. It’s your savings so do with it as you please.
8. Look for Deals/ Shop for Sales
This can encompass all of your spending but it definitely should include things like insurance, your car and vacations.
9. Verify your Interest Rates
This is especially important if you’re trying to pay off high interest credit card debt, it’s important that you know what your interest rates are and also make sure there aren’t any better deals out there that you’re missing out on.
10. Set up Your RRSPs
We all say that we’re going to start contributing to our RRSPs but in reality who actually does contribute on a regular basis. Start making monthly contributions, they don’t have to be big contributions, any amount you can afford will help.
Now that you’ve amassed your financial to-do list, start working on it, you’ll be surprised at how quickly it becomes second nature and quickly you’ll start to see a difference in now you treat your money.