Do you take as much care of your financial well-being as you do your physical health? When was the last time you had a financial check-up?

Think about it – just like the manufacturer recommends that your vehicle undergoes regular maintenance, and your doctor suggests scheduled visits, won’t it be good to have an annual financial check-up?

As the New Year unfolds, it’s a good time to conduct a financial check-up to review how you've done financially over the past twelve months and make sure you're still heading in the right direction. If this is your first check-up, don’t worry, there’s no time like the present to get started on the right path.

We have designed our 12 Week Check-Up Series to help you assess important areas of your finances. Each week, we will explore one topic and provide assignments that can help you improve in that area (where necessary).  

It’s time to begin your 12 Week Check-Up!!

Week 1: Know How Much You Make and Where Your Money Goes 

Knowing how much money you earn and spend each month puts you in a better position to save and plan for the future.

What is your monthly income?

Your monthly income is basically all of the money that you bring home at the end of the month. It includes your net pay, which is the amount you take home after taxes, Social Security and other deductions and any other sources of income that you receive. For example, any money earned from a second job, a rental property, child support or alimony should be included in your monthly income.

What are your monthly expenses?

Your monthly expenses, on the other hand, include all the money that you spend each month. Some expenses, like your mortgage, car payments, child support and student loans are fixed – that is, you are required to pay the same amount every month at the same time of the month. Others are more flexible. For example, the money you spend on food, electricity, beauty needs and entertainment may change from month to month.

Your prescription* for Week 1:

1. List your monthly income–from all sources–for a specific period of time (no less than three months).
2. List all your monthly expenses (every receipt counts). Divide the list into fixed and flexible expenses.
3. Subtract your total expenses from your total income:

• If you have more expenses than income it means you have a deficit. Reevaluate your income and adjust your spending.
• If your income matches your expense it means you are breaking even each month. While you are able to cover your expenses, you do not have any money left over at the end of each month. Assess what and where you can improve.
• If you have more income than expenses it means you have a surplus. Put the extra money into a savings account.

Next week we focus on Setting S.M.A.R.T. Goals