How to Improve Your Finances w/a Personal Finance Audit

Today's episode, I'm gonna help you do your own personal financial audit. Now, for those of you that are really not numbers friendly, I'm gonna make this as simple as possible, but to also getting what you need out of it. I know not everybody really. Loves to dive in the numbers, you know, and so talking about this can kind of get the glaze over. Hopefully you're able to understand everything I share, giving you simple action steps to do this audit on your own. And really in an audit, there's always a goal. There's always, why are we doing this? As you're listening to this episode and you're like, okay, she's gonna tell me how to audit my numbers. Why do I wanna do that? And it can be very, something very simple. It does not need to be complex. And maybe you're just like, I just need to know. And that's enough of a reason to start with. All right, first step to assessing your numbers, looking at your personal finances. And this is the same exact. Steps within reason. I mean, we do a definitely a deep dive that I do in my VIP session, my retirement ready VIP session. Get out your pen and paper, be able to do this, and if at the end of it you're like, Hmm, two hours, let's dive deeper, let's get into these numbers, look at it, dive deeper, create you a plan to make moving forward easier. The first step you're gonna do is you're gonna assess your current spending. You're gonna start understanding where your money is going. I'm gonna leave this simple, start you out with one section and move to another one. It's not gonna be complicated. I really I love to track numbers, not everybody does. And recognizing that, you know, there's, there's better ways to get to this information. The first step I want you to do. Is I want you to write a list of your bills for the month, so anybody that you automatically or manually pay every single month should go on this list. You know who it is, what it's for, and the amount. Create that list, total the amount. Voila, there is your bills amount. Most bills. We are in some sort of an obligation that, you know, we can't do a lot of maneuvering through with that. With that being said, there is an exception to probably subscriptions and memberships, unless you signed up for a long term, you know, got a deal, whatever it is. Usually these bills. You're committed to every single month. Recognizing that, looking at that this is a step I have my clients do is write out a bills list. And I remember my one client, she came back and she says, well, my bills amount is lower because I did away with, I think she did away with three, and she said. I could do it better. And I loved that she said those words. It wasn't that I just am gonna get rid of 'em, I don't need them. She was gonna find an alternative way of actually doing things, and I believe that is huge. Instead of saying cut things, I love to say, you know, explore it. Because once we cut and eliminate, we go into that restrictive mode, which leads us into scarcity. Like, I don't have enough and we, it's really hard for us to see how things are moving, but to be. Innovative like my client was, and just look at your bills and if your list looks great to you, you're done. But if it's like, Hmm, you know, I forgot I had that one. I've heard that. Or you know, instead of doing that, I think there's a better option. Huge. Love it. If you have those, go ahead and do those. All right. The second area to assess your spending. This is going to be a number that's not quite as big, but it is going to be a little more difficult to get to if you have not been tracking, but I'm going to make it very simple for you. This section is groceries, fuel, eating out, entertainment, convenience stops. I've named it convenience stops. This is if you stop at the convenience store, you stuck at the swig for a drink, you stop at Starbucks, you stop for breakfast on the way to work, whatever that is. Those are kind of convenience stops your kids get outta dance, you know, all of those things. Those are the items you're looking for. Again, groceries, fuel, eating out, entertainment, convenience stops. These are things that you spend money on fairly regularly. Some really are needed and others maybe not so much, but that's not what we're talking about today. To start with groceries, how often do you shop? Once a week, twice a week. Twice a month. Go back and look at your, you know, it's easy with our digital to look and just go, okay, how many times have I gone in the grocery store? What does a big right big shopping trip usually cost? Okay. I go four times a month, or I go two times a month. Kind of get your average. That'll align that out. With your fuel, how often are you filling up? I know some people are like, I'm every four days, and usually people do know this, it's every four days or it's every two weeks, or it's whatever it is and what is now fuel goes up and down. I understand that, but what is the current cost of filling up your tank? It's 50 bucks and you do it twice a month. There's a hundred dollars in fuel at that to your grocery amount, and then you can go from there. These others are a little bit smaller, kind of roughly estimate those. Add those all together and this with your, you know, this is your spending amount. This kind of gives you that second bucket. If you've heard me talk about the buckets, we talk about bills spending and savings. Yes, that's where we're headed next is savings. What I want you to do, I'm gonna walk you through an exercise I don't believe I've done on here. I know, hey, I've talked about it briefly, but, savings is money that is not being spent in the month. Now there's a little caveat to, you know, being able to budget for irregular expenses, things like that, but we're not getting into that today. Your savings is going to be made from your retirement account. Health savings account, your FSA, if you still have one of those and can participate your immediate savings, you have a high yield savings, or you just have a regular savings with your bank or credit union, or maybe you have a special Christmas Club account. All of those things are savings. I want you to list the amount that you are contributing to all of those things for the month. Okay? We just want a month total. Then what I want you to do is I want you to take your gross pay for the month. The amount you had for savings divided by your gross pay, so your gross income, especially if your retirement accounts are pre-tax. That's why we're using this number and you're gonna divide quick math lesson here just as a reminder. You're gonna divide, you're gonna get a decimal. Move that decimal to the right two spaces. Okay? I did this the other day, but I had like five zeros, threw me for a loop. So just wanted to remind you. Move that over. You're going to have either one or two digits on the left side of the decimal. That's the only ones we we care about. Whether you have an eight, a 10, a 12, whatever that number is, I want you to write it down. This is your starting point of savings. This is called your savings rate. This you can control, you can fluctuate, you can make things happen within this number, within all of these savings, these savings are crucial for now and for later. I was working with a client the other day and I said, well, what does 80 year, 80-year-old you want. We've gotta think about that 80-year-old you. However, there is a balance and I get that. I had a call, it's been probably almost a year ago, and the individual, she was saving over 50% of her income. Circumstances are different for everyone. I don't want you to take that number into account, but she was worried. So regardless of this number, you might feel worried. You might not feel worried, and that's okay. I just want you to create that starting number. But really this number is what's going to support your retirement. This is what's gonna support your stability right now. Really that number is 80-year-old you and current you. So be, mindful of that. I would love for you to go listen to episode 30 where I talk about savings as the number one habit. It, it goes into all the reasons why and how it can filter out to different areas. And based on that, I am creating a savings course, hopefully, to come out before the end of summer where I can support individuals in just this area because I have such a, belief in learning to save. Supporting that and creating healthy habits of saving. Look for that. I know it's a ways off, but if you have been a listener for a while, stick around. We'll be able to do that. But also the other thing is and it's gonna kind of lead us into the next area of our financial audit it, episode five, where I talk about do you pay off debt or save, I just had a discussion with my client. She's like, I, I wanna get rid of this debt, but do I really need to save? And, and we talk through it and I share my thoughts on episode five. And, you know, really there is a balance, especially as you're moving closer to retirement. You know, getting rid of that debt kind of allows you to have more freedom in retirement. But we need to know how to provide for the things that debt got. Got for us. I hope that makes sense. So listen to that, you know, kind of, you know, to help you understand that there is a balance. I talk about all that in there, and that's the next area for our audit is debt. If you are somebody who has debt, you're gonna wanna listen. This can be a whole big thing, but I'm not gonna get into that. What I want you to do is make a list of your debt. This is most important and it's very simple. You know, you're, you know who you owe and you know, you know what that is, but I want you to find out who it is. So, credit card, mortgage, car loan, he heloc. Like all of those things are gonna go on this list. What it was for, what the balance is. What's your monthly payment minimum? I want you to start, go with the minimum right now. And then what is the interest rate? Listing that out, totaling those minimum monthlies kind of gives you a view of another spending area. Right now, you might have listed it up in bills, that's fine, but this breaks it out and understands that. What is creating your debt? If you answered the, what is this for? And you're like, I don't remember, houston, we have a problem type of thing. I want you to go to listen to episode 1 0 2. There are three camps. For usually. Okay, I'm simplifying it. Yes, I know three camps for debt generation. Go listen to that, determine where you are. That also gives you action steps and you know, to, to move, maneuver your way out of there. All right. The last area that we need to audit is one that's not necessarily numbers. It's also an area that most people don't have. This is the biggest reason that you have to care about all the things we just talked about. What are your financial goals? Now, I know most people are like, I just need to get outta debt, or I wanna increase my savings. Those are great things to strive for, but what is your goal? What is your, what is your thing that you want to reach? How are you preparing for 80-year-old you? What does that look like? A really cushy retirement or you know, do you not care about retirement or are you still in the need of I want to buy a house? Really think through what is your long-term financial goals. What do you wanna have accomplished in five years, 10 years, 15 years? So right there I did short, mid, and long term. You don't have to have one for all three, in fact, just one is really good. And if you remember the first of this episode where I shared, I had my two, I had my two, I had my one that was affecting my current life. Because remember we talked about, don't forget current, you. But also don't forget, 80-year-old you on what is that financial goal? Saving for retirement can come in so many different ways. Really getting into learning about what that can look like. My one client was looking for rental income. You know, other clients are just looking for, you know, investing in the four oh ones and those things like that. If you're somebody who's passionate about wanting to own some investment property and have that coming in and being able to manage that, that would be a long-term goal, really sit with yourself and ask yourself the following question, what do I want my money to create? For me, that's all this goal is. I think goals become very difficult. For myself too, we're like, well, what am I supposed to do? What am I supposed to want? And so if you just say, what do I want my money to do for me? And start writing. Don't even think about if this is a goal, if this is short, if this is long, if just start writing. What do I want my money to do for me? And if you write pay off debt, I want you to go further than that. That's not a goal. That's something we need to get out of the way to reach our goal. It's great, like I said, it's a great thing to shoot for and yes, we wanna do that, but what is your goal? What do you aspire? What do you wish if everything was at fingertips, you had the money. Within reason, 'cause I want you to be real about this, but your debt is gone, your worries about different things are gone. What would you want your money to do for you? And I believe if you are able to answer that question, get yourself excited about it. Take the steps to get there are so simple. All right. I know we've covered a lot, but, and if you're like, man, I still don't know. This won't make sense to me. Remember, in two hours I can walk you through this and more lay out exactly what you need to do moving forward. We'll dive into where you are right now. We'll answer all of these things we did today and really just explore who you are with money if you need help with creating those goals or understanding who you are. With money, definitely two hours. Everybody's got two hours to spare, so go click down in the show notes. You can either jump on a free call with me to ask some questions, or you can immediately purchase the retirement ready VIP session. I look forward to supporting you and until next week. Today's episode, I'm gonna help you do your own personal financial audit. Now, for those of you that are really not numbers friendly, I'm gonna make this as simple as possible, but to also getting what you need out of it. I know not everybody really. Loves to dive in the numbers, you know, and so talking about this can kind of get the glaze over. Hopefully you're able to understand everything I share, giving you simple action steps to do this audit on your own. And really in an audit, there's always a goal. There's always, why are we doing this? As you're listening to this episode and you're like, okay, she's gonna tell me how to audit my numbers. Why do I wanna do that? And it can be very, something very simple. It does not need to be complex. And maybe you're just like, I just need to know. And that's enough of a reason to start with. All right, first step to assessing your numbers, looking at your personal finances. And this is the same exact. Steps within reason. I mean, we do a definitely a deep dive that I do in my VIP session, my retirement ready VIP session. Get out your pen and paper, be able to do this, and if at the end of it you're like, Hmm, two hours, let's dive deeper, let's get into these numbers, look at it, dive deeper, create you a plan to make moving forward easier. The first step you're gonna do is you're gonna assess your current spending. You're gonna start understanding where your money is going. I'm gonna leave this simple, start you out with one section and move to another one. It's not gonna be complicated. I really I love to track numbers, not everybody does. And recognizing that, you know, there's, there's better ways to get to this information. The first step I want you to do. Is I want you to write a list of your bills for the month, so anybody that you automatically or manually pay every single month should go on this list. You know who it is, what it's for, and the amount. Create that list, total the amount. Voila, there is your bills amount. Most bills. We are in some sort of an obligation that, you know, we can't do a lot of maneuvering through with that. With that being said, there is an exception to probably subscriptions and memberships, unless you signed up for a long term, you know, got a deal, whatever it is. Usually these bills. You're committed to every single month. Recognizing that, looking at that this is a step I have my clients do is write out a bills list. And I remember my one client, she came back and she says, well, my bills amount is lower because I did away with, I think she did away with three, and she said. I could do it better. And I loved that she said those words. It wasn't that I just am gonna get rid of 'em, I don't need them. She was gonna find an alternative way of actually doing things, and I believe that is huge. Instead of saying cut things, I love to say, you know, explore it. Because once we cut and eliminate, we go into that restrictive mode, which leads us into scarcity. Like, I don't have enough and we, it's really hard for us to see how things are moving, but to be. Innovative like my client was, and just look at your bills and if your list looks great to you, you're done. But if it's like, Hmm, you know, I forgot I had that one. I've heard that. Or you know, instead of doing that, I think there's a better option. Huge. Love it. If you have those, go ahead and do those. All right. The second area to assess your spending. This is going to be a number that's not quite as big, but it is going to be a little more difficult to get to if you have not been tracking, but I'm going to make it very simple for you. This section is groceries, fuel, eating out, entertainment, convenience stops. I've named it convenience stops. This is if you stop at the convenience store, you stuck at the swig for a drink, you stop at Starbucks, you stop for breakfast on the way to work, whatever that is. Those are kind of convenience stops your kids get outta dance, you know, all of those things. Those are the items you're looking for. Again, groceries, fuel, eating out, entertainment, convenience stops. These are things that you spend money on fairly regularly. Some really are needed and others maybe not so much, but that's not what we're talking about today. To start with groceries, how often do you shop? Once a week, twice a week. Twice a month. Go back and look at your, you know, it's easy with our digital to look and just go, okay, how many times have I gone in the grocery store? What does a big right big shopping trip usually cost? Okay. I go four times a month, or I go two times a month. Kind of get your average. That'll align that out. With your fuel, how often are you filling up? I know some people are like, I'm every four days, and usually people do know this, it's every four days or it's every two weeks, or it's whatever it is and what is now fuel goes up and down. I understand that, but what is the current cost of filling up your tank? It's 50 bucks and you do it twice a month. There's a hundred dollars in fuel at that to your grocery amount, and then you can go from there. These others are a little bit smaller, kind of roughly estimate those. Add those all together and this with your, you know, this is your spending amount. This kind of gives you that second bucket. If you've heard me talk about the buckets, we talk about bills spending and savings. Yes, that's where we're headed next is savings. What I want you to do, I'm gonna walk you through an exercise I don't believe I've done on here. I know, hey, I've talked about it briefly, but, savings is money that is not being spent in the month. Now there's a little caveat to, you know, being able to budget for irregular expenses, things like that, but we're not getting into that today. Your savings is going to be made from your retirement account. Health savings account, your FSA, if you still have one of those and can participate your immediate savings, you have a high yield savings, or you just have a regular savings with your bank or credit union, or maybe you have a special Christmas Club account. All of those things are savings. I want you to list the amount that you are contributing to all of those things for the month. Okay? We just want a month total. Then what I want you to do is I want you to take your gross pay for the month. The amount you had for savings divided by your gross pay, so your gross income, especially if your retirement accounts are pre-tax. That's why we're using this number and you're gonna divide quick math lesson here just as a reminder. You're gonna divide, you're gonna get a decimal. Move that decimal to the right two spaces. Okay? I did this the other day, but I had like five zeros, threw me for a loop. So just wanted to remind you. Move that over. You're going to have either one or two digits on the left side of the decimal. That's the only ones we we care about. Whether you have an eight, a 10, a 12, whatever that number is, I want you to write it down. This is your starting point of savings. This is called your savings rate. This you can control, you can fluctuate, you can make things happen within this number, within all of these savings, these savings are crucial for now and for later. I was working with a client the other day and I said, well, what does 80 year, 80-year-old you want. We've gotta think about that 80-year-old you. However, there is a balance and I get that. I had a call, it's been probably almost a year ago, and the individual, she was saving over 50% of her income. Circumstances are different for everyone. I don't want you to take that number into account, but she was worried. So regardless of this number, you might feel worried. You might not feel worried, and that's okay. I just want you to create that starting number. But really this number is what's going to support your retirement. This is what's gonna support your stability right now. Really that number is 80-year-old you and current you. So be, mindful of that. I would love for you to go listen to episode 30 where I talk about savings as the number one habit. It, it goes into all the reasons why and how it can filter out to different areas. And based on that, I am creating a savings course, hopefully, to come out before the end of summer where I can support individuals in just this area because I have such a, belief in learning to save. Supporting that and creating healthy habits of saving. Look for that. I know it's a ways off, but if you have been a listener for a while, stick around. We'll be able to do that. But also the other thing is and it's gonna kind of lead us into the next area of our financial audit it, episode five, where I talk about do you pay off debt or save, I just had a discussion with my client. She's like, I, I wanna get rid of this debt, but do I really need to save? And, and we talk through it and I share my thoughts on episode five. And, you know, really there is a balance, especially as you're moving closer to retirement. You know, getting rid of that debt kind of allows you to have more freedom in retirement. But we need to know how to provide for the things that debt got. Got for us. I hope that makes sense. So listen to that, you know, kind of, you know, to help you understand that there is a balance. I talk about all that in there, and that's the next area for our audit is debt. If you are somebody who has debt, you're gonna wanna listen. This can be a whole big thing, but I'm not gonna get into that. What I want you to do is make a list of your debt. This is most important and it's very simple. You know, you're, you know who you owe and you know, you know what that is, but I want you to find out who it is. So, credit card, mortgage, car loan, he heloc. Like all of those things are gonna go on this list. What it was for, what the balance is. What's your monthly payment minimum? I want you to start, go with the minimum right now. And then what is the interest rate? Listing that out, totaling those minimum monthlies kind of gives you a view of another spending area. Right now, you might have listed it up in bills, that's fine, but this breaks it out and understands that. What is creating your debt? If you answered the, what is this for? And you're like, I don't remember, houston, we have a problem type of thing. I want you to go to listen to episode 1 0 2. There are three camps. For usually. Okay, I'm simplifying it. Yes, I know three camps for debt generation. Go listen to that, determine where you are. That also gives you action steps and you know, to, to move, maneuver your way out of there. All right. The last area that we need to audit is one that's not necessarily numbers. It's also an area that most people don't have. This is the biggest reason that you have to care about all the things we just talked about. What are your financial goals? Now, I know most people are like, I just need to get outta debt, or I wanna increase my savings. Those are great things to strive for, but what is your goal? What is your, what is your thing that you want to reach? How are you preparing for 80-year-old you? What does that look like? A really cushy retirement or you know, do you not care about retirement or are you still in the need of I want to buy a house? Really think through what is your long-term financial goals. What do you wanna have accomplished in five years, 10 years, 15 years? So right there I did short, mid, and long term. You don't have to have one for all three, in fact, just one is really good. And if you remember the first of this episode where I shared, I had my two, I had my two, I had my one that was affecting my current life. Because remember we talked about, don't forget current, you. But also don't forget, 80-year-old you on what is that financial goal? Saving for retirement can come in so many different ways. Really getting into learning about what that can look like. My one client was looking for rental income. You know, other clients are just looking for, you know, investing in the four oh ones and those things like that. If you're somebody who's passionate about wanting to own some investment property and have that coming in and being able to manage that, that would be a long-term goal, really sit with yourself and ask yourself the following question, what do I want my money to create? For me, that's all this goal is. I think goals become very difficult. For myself too, we're like, well, what am I supposed to do? What am I supposed to want? And so if you just say, what do I want my money to do for me? And start writing. Don't even think about if this is a goal, if this is short, if this is long, if just start writing. What do I want my money to do for me? And if you write pay off debt, I want you to go further than that. That's not a goal. That's something we need to get out of the way to reach our goal. It's great, like I said, it's a great thing to shoot for and yes, we wanna do that, but what is your goal? What do you aspire? What do you wish if everything was at fingertips, you had the money. Within reason, 'cause I want you to be real about this, but your debt is gone, your worries about different things are gone. What would you want your money to do for you? And I believe if you are able to answer that question, get yourself excited about it. Take the steps to get there are so simple. All right. I know we've covered a lot, but, and if you're like, man, I still don't know. This won't make sense to me. Remember, in two hours I can walk you through this and more lay out exactly what you need to do moving forward. We'll dive into where you are right now. We'll answer all of these things we did today and really just explore who you are with money if you need help with creating those goals or understanding who you are. With money, definitely two hours. Everybody's got two hours to spare, so go click down in the show notes. You can either jump on a free call with me to ask some questions, or you can immediately purchase the retirement ready VIP session. I look forward to supporting you and until next week.