No matter what letter you identify with in the LGBTQ rainbow, there are some basic steps you need to take to get your finances in order. So, take Pride in taking charge of improving your financial well-being. These first three steps seem easy, but embracing them and sticking to them will take commitment.
Tip one is to get organized! You need to know where are your financial documents. Pull together every document you can think of that involves your money. Think mortgage/lease agreement, bank statements (checking and savings), your latest tax filing, any investment statements you may have, insurance policies (home/renters, auto, health, long-term care, etc.), work benefit statements. Basically, any document that affects your financial life you need to have readily available. You also need to know what the document is, what it covers, and how it benefits you. If you don’t understand any of these documents, it’s time to consider making an appointment with a fee-only financial planner. My pro tip here is to keep all of these documents in one binder and have them readily available. An electronic copy is also a good idea. I like to offer my clients a grab-n-go binder to get them started. You customize yours as you see fit.
Tip two is to know what you owe and what you own. You’ve heard that old saying, ‘you don’t know, what you don’t know.’ Well, it couldn’t be more accurate when it comes to our financial picture. You must know and understand how much cash flow you have and how it is flowing. Prepare a simple, personal balance sheet detailing your assets, liabilities, and any equity. This is your snapshot in time of where you are and what you have. List all assets and equity on one side such as checking, savings, investments, home value, car value, etc. Next, list all of your liabilities such as credit card balances, car loans, student loans, mortgages, etc. Subtract your liabilities from the assets and this will yield your net worth at that time. If negative, don’t be discouraged. Again, this is a snapshot in time and you have the power to take control and make changes.
Tip three is to conquer your cash flow. This is where it starts to get real. If you didn’t like the results from tip two, this is where the rubber meets the road. You need to become conscious of your spending. In fact, even if your results in tip two were positive, your spending should now be harnessed and become intentional. You need to develop a spending and savings plan for your monthly cash flow. Over time, you will start planning your cash flow annually, but for now, take it one month at a time. Spend intentionally! Choose where you spend your money and target things that benefit you financially, and emotionally. Always pay yourself first! This is key to building wealth. Be sure you are saving from your income; be sure you are enrolled in any employer plans that pay matching funds; make saving automatic. A good target is to always be saving 15% or more of any income you have. If you are not there don’t worry, just get started.
These first three tips seem basic, but they do involve examining and changing your habits. It may be hard to get started, but you’ll be PROUD you did! You may also need help. Seek out a fee-only Certified Financial Planner™ to help you. Even if you have debt, it could be money well spent as fee-only planners are supposed to work in your best interest. Be careful not to confuse this term with fee-based, or generic terms such as financial advisor, broker, wealth manager, etc. Those professionals fulfill different needs in the financial services world. You can read more in my post, Fee-only vs. Fee-based Advisers: Is There a Difference. As an independent Certified Financial Planner™, I can help you understand your finances, define your goals, and take charge. Contact me and let’s get started. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #Pride #Pride2019 #CFPPro #savemoney #LGBTQ #QueerMoney