The best time to press the refresh button with financial goals is at the end of the quarter. Here’s a step-by-step guide to have an end of quarter financial check-in.
Five Steps to Have an End of Quarter Financial Check-In
1. Start a plan to pay off debt and invest
For your quarterly financial check-in the first step is to get started! Time is money. You need to start a plan to pay off debt and invest! Instead of beating yourself up for not yet achieving your goals use the end of the quarter as a time set aside to start now.
It’s easy to talk yourself out of making good financial moves. You think, “I’ll start investing when I make more money.” Or “Once my expenses drop after my surgery.”
The truth is, there’s no perfect time to start, but there are hard costs of waiting.
For example, with the average student loan debt of $37,172, assuming a 20-year repayment with 4.5%, you’d spend $19,268.42 in interest.
Not starting a debt payoff plan today is costing you thousands of dollars. I believe with a solid plan you can get out of debt in 36 months or less.
Time is money! You can spend a lifetime paying interest on your debt or earning interest on your investments.
If you don’t know where to start, then join me in the free 7-day series: “How to Manage Your Money.” Get a step-by-step plan to pay off debt, invest, and manage your money like a boss (Click here!).
2. Fill in your Balance
Your Balance Sheet is like a DTR with money (define the relationship!). It’s a snapshot of exactly where you stand. It shows the total current value of your assets (everything you own- home, car, savings, investments) and the total current value of your liabilities (everything you owe- like you mortgage, car, student loans, or credit cards.)
Then your net worth is your assets minus your liabilities. Take a breather it can be big time in the negative.
Your Balance Sheet is the ultimate B.S. indicator. It shows, are you borrowing your way into looking rich? Or are you really building wealth?
3. Fill in your Statement of Cash flow
Next fill in your Statement of Cash Flow. This shows the cash inflows and outflows in a month. Or in other words, your paychecks coming in and expenses going out.
Some people say you are what you eat. I believe you are what you spend your money on.
Money is the currency of the heart. Wherever your heart is, your money will follow. Looking at all the transactions from the past month shows what you value. It’s very tedious going through line by line ALL your expenses, but you’ll really get a feel for your spending patterns.
When you do this exercise, I want you to ask yourself, “If I am what I spend, then what am I? And more importantly does that fit your values?
4. Fill in Last Month’s Income Statement
An Income Statement shows your income and expenses over the month.
In the personal finance world you hear, “Make a budget!” And it feels totally restraining. You HATE the idea of a budget! I get it. As T-Swift said, “haters gonna hate hate hate.”
Shake it off and get over your fear of budgeting!
Instead of feeling restrained with budgets, feel empowered. An Income Statement puts a dollar sign to your to-do list. Think of it as an executive bucket list. If you want to take a sabbatical to travel, your Income Statement is the tool to use to make your dreams a reality. Fill in your actual income expenses from the last month.
5. Fill in Your Upcoming Quarter’s Income Statement
This step’s the most important when having an end of the quarter financial check-in. You’ve seen where your money went. Now it’s time to execute where you want it to go for the next three months.
Forecast your income and expenses for the upcoming quarter.
Money can seem totally unpredictable and completely out of your control, but most of what you spend is entirely known, literally fixed, and in your control.
Most of your expenses are fixed and exactly the same each month. It isn’t a shocker how much your mortgage or Hulu subscription is (you signed up for that!).
As Chief Financial Officer, running the business of you, project your flex expenses for the month. These vary from month to month, like Christmas gifts or purchasing a flight.
End of Quarter Financial Check-In Summary
As a recap to check-in on your finances, the first step is to get started. Time is money. Don’t beat yourself up. Start now with a plan to pay off debt and invest.
Next, your Balance Sheet is a snapshot of where you stand now! It show’s the big picture of what you own and owe. For example, you’ll see the total you owe on your student loans.
On your Statement of Cash Flow and Income Statement you’ll see your monthly payment. Completing your Statement of Cash Flow is a great exercise to see where your money’s going. Take your power back with money, by projecting your income and expenses for the upcoming quarter with Income Statements.
P.S. Did you like this? Then share it with your friends, family, and coworkers who also geek out on personal finance. If you want more, then get started on a step-by-step plan to pay off debt and invest with the free 7-day series: “How to Manage Your Money.”
>>Click here to get started!>>
Remember, you only live once. Be smart with your money now.
