Financial Health Check

Volume One

You can’t be on a diet without dealing with the ever so embarrassing weigh-in aspect of it. I remember having to do those during my teenage Weight Watcher days. Every Wednesday, I had to stand before a group of women who were waiting to see my weight loss. It wasn’t so bad actually; the group leader Marilyn was a great motivator. I could always count on her for support. 

Like those weekly check-ins, I believe one for financial health is just as important.

What is a Financial Health Checkup?

In layman’s terms, I review how things are going for me financially. I do one every month. Religiously. Why is this important? Awareness. To tackle an issue head-on you first must know the existence of one. The key is to be proactive.

I look for a way to improve my cash flow for that month. I go over what worked and what didn’t work. If I have a setback, I make mini goals and try to correct the issue.

The monthly checkups prepare me for the annual financial health checkup. This is a more drawn-out process. Here I look over the following:

• Insurance – do I have too much? Not enough? Are my deductibles too high/low?
• Debt tracking – where am I in terms of paying down my debt.
• Saving tracking – did I meet my saving goals?
• Credit Report – it’s free once a year. Any surprises would delay future application approval.
• Expense tracking – can anything be eliminated? Do I really need to do Uber Eats that often?
• Budget realignment – which categories are over/underfunded?
• Retirement – am I still on track?

Please note: expense tracking is time-consuming due to the fact that I look at my spending habits for three months. I use both my credit card statement as well as my checking account statement. I average those three months.

Why three months? I believe it gives me a true picture of my current spending habits. For example, I discovered that I was overspending on my food allowance the latter part of the year. I adjusted accordingly.

I am a single apartment dweller so my personal finances are basic. If they were more complex, I would check up on things such as all home warranties and review any estate planning I may have set up.

I know that was information overload and you may be wondering how to begin: here is a financial health assessment tool from Nerdwallet.

So How did Things go for me in March?

The biggest problem for me right now is transportation. For 14 years, I’ve been lucky enough to be able to use public transportation for work. Due to the pandemic, I’ve been blessed with the work-from-home option. That’s the good news. Of course, with the good comes the bad: my car got stolen.

I know, what a headache right. Public transportation works wonders when it is a quick trip but when the item you want is unavailable on Amazon and a twenty-five-minute ride it usually translates into a two-hour time suck.  That was my do not pass go, go directly to jail moment. I need to buy another car.

That’s an unexpected expense. It is one thing to have to deal with an old car and say okay, I know I need to replace it one day but when the decision is forced upon you, there goes your anxiety. Through the roof. I am not ready for another car payment. No. No. No. No. No. I repeated in my head a thousand times.  My current budget does not allow for it.

So, with no increase in pay on the horizon, how do I deal with this reality? I just have to take it one step at a time and plan it out. I think about what would work best for me in the long run.  My solution is to look at my budget and see where I can allocate money to a car fund.

I’m not the type of person to flip cars every three or four years so whatever I do buy it will have to be durable. I do know that the plan is to buy a pre-owned car the make/model is negotiable.

The Quasi Bright Side of Things

The only good luck money-wise I’ve experienced during the pandemic is that my apartment building issued a rent increase one month before the pandemic. That saved me $960. I believe the extension is for six more months. Fingers crossed that Biden is feeling generous.

The second most important personal financial issue I addressed this month was my 401k. I hadn’t looked at it in months and decided to take a sneak peek. Thanks to the craziness of the financial market, what worked a year ago doesn’t necessarily work now.

I reviewed its performance and rebalanced it to maximize growth.  The turbulence in the market tells me that I probably need to fine-tune it again towards the end of the summer.

That in a nutshell is my financial weigh-in for March.