The first day of Fall Equinox is September 23 which happens to be my birthday. Me – laughs a little too loud. Wipes away a tear drop. Moving on! Did you know that the equinox is when day and night are equal? Pretty cool! On September 23rd, we will have daylight hours equal to the hours of darkness. It’s the perfect balance! So, as we get ready for pumpkin spice everything (bad) and football tailgating (good), it’s a great time to check up on and balance your finances. Take inspiration from the equinox and keep it simple as 1 – 2 – 3!
1. Check Your Credit Report
Go to Annual CreditReport.com to pull your credit reports for free. I personally check one credit report from each of the three credit bureaus once every 4 months. Since everyone is allowed one free report per year, this allows me to check my credit reports throughout the year with each report becoming available again in 12 months. If you would rather pull all three reports at once, I’m fine with that. I mean there are people that like pumpkin spice stuff, too! First, you want to check to be sure the report is accurate. There aren’t any unexpected accounts are balances being reported. Although your credit score is important, you are checking for accurate reporting not your score. If you are doing the right things like paying your bills on time, not carrying over credit card balances or getting the balances owed trending down, your credit score will take care of itself. Contest inaccurate information that appears on your report online to Experian, Equifax and Transunion directly.
2. Check Your Net Worth
This is an important and underutilized tool that is easy to use and perfect for a financial checkup. Net worth means you add up the value of all your assets like cars, equity in your home, retirement account balances and savings. Then you subtract out your liabilities. Liabilities are the balances you have on car loans, student loans, or any loans. Don’t forget to subtract off any balances you are carrying over of credit cards, medical bills or any other unsecured or personal loans. The good minus the bad give you your net worth. Simple as pumpkin spice scented dryer sheets! Access a simple net worth worksheet for free here. This tool is so useful because you can compare it with your net worth from the beginning of the year or from two years ago or whenever you figured your net worth the last time. Has your net worth gone up? If yes, good for you! Keep up the good work. Has your net worth gone down? Better re-evaluate your budget to determine the cause. Work on lowering your expenses and picking up additional income to get your net worth trending up. If you haven’t calculated your net worth in the past, start now! You’ll have this net worth statement to compare with future net worth statements. This is the essential financial check up item that you’ll utilize like a pumpkin spice frappuccino!
3. Invest the Difference
Are you spending less than you make? Are you investing the difference? Did your net worth go up? If so, then you need to figure out where to spend or invest the difference. Maybe you simply need to build up your reserve account to six months. Maybe you want to grow your retirement through a 401k or another IRA. Maybe you want a major home improvement done. No matter, you want to invest the difference to get the most out of your money. Surpluses should be planned for and the spending mapped out as much as regular budget items. To leave any surplus money out of your financial plan is to waste it. Invest in your security and then invest in your dreams. Meet with a financial planner or talk to planners who run your work retirement plan Examine the plans you are already invested and check on the costs. Are you happy or do you need to make a change? If your net worth went down, figure out why your spending was higher than your income. Examine bank statements to compare spending with your budget. You may have made a big purchase or taken out student loans to go back to school. Just be sure you are on track to start increasing that net worth again. If you aren’t sure what to do, contact a non-profit credit counseling agency about your financial situation to look for solutions. If you have surplus income but want to learn more about your credit and how to get the most of your income, a Financial Health Plan (FHP) will help you get your finances on lock down. As always, personal finances are about taking action.
Don’t purchase anything with pumpkin spice in the name. You’re welcome!