Dealing With Finances In Quarantine: 4 Easy Actions Anyone Can Take To Feel More Organized
During quarantine you might be finding yourself doing some of the things you've put off all year or...still ignoring them. Either one is OK. This time in our lives has (thus far) been interesting to navigate for many reasons. And it's probably safe to say it isn't anything like we thought it would be, right? Regardless, should you be that person who's discovered some newfound motivation to clean, get organized, finish that art project, learn a new skill, or so on, consider adding your money into the mix and tackling one of these areas we tend to neglect during the year:
Create smarter mail flow.
You might have noticed that the influx of junk mail flying into your mailbox each day is considerably lighter. Due to the coronavirus and limited staffing in so many areas, we are seeing the impact in unexpected ways. This may not seem like a money move, but if your incoming mail doesn't have a home beyond a pile on the table, it's a recipe for lost and late bills. Now is a great time to get some structure. Knowing where to put your mail and bills when they come in is a game-changer.
To get started, designate an area for incoming mail. Make sure you have a place for bills, magazines/catalogs, coupons, miscellaneous. If there is more than one person in your household, make sure each person has a miscellaneous section. It's kinda like the mailroom at your office...at home. When the mail comes in, be sure to sort it accordingly and then pick a day of the week to clear it out.
Make an easy budget.
Most put off budgeting because they aren't sure where to start and thinking of numbers can be overwhelming. And frankly, it's not something we all dream about doing on a sunny Saturday. Now, since the days are blurring together and schedules look different, it's the perfect time to ease into that budget to take control of your money (partly because your spending is probably looking a lot different).
First step is to look at what you spent last month for the following categories:
- Survival expenses: home, food, health care, car, etc.
- Minimum debt payments: car loans, student loans, and credit cards.
- Variable expenses: These are the "nice-to-haves."
Once you know those totals, subtract them from the income that came in. Based on what that number is (a positive, negative, or zero), make adjustments for the next month. Start there, and see how it goes for a month. You don't need to use advanced budgeting methods out of the gate; you simply need to get a handle on what is coming in and what is going out.
Peek at your long-term numbers.
When it comes to financial health, there are other numbers we should pay attention to beyond our checking account. The most comprehensive number is your net worth. This number will fluctuate based on your money moves like buying a house, taking on debt, or paying off debt, but it's one of the best ways to look at your finances holistically. In a nutshell, your net worth is your assets (things you own) minus your liabilities (things you owe).
The great thing about your net worth is it will require you to look at and know some other numbers that you probably aren't looking at as frequently like your retirement, debts, and the value of things you own. The good news is the internet is crawling with easy calculators to help you get to your golden number. Once you know what your net worth is, see how it compares to the average based on your age and then set a goal.
Create money goals.
Every money plan should start with a vision for your life. Why? Because not having one is like routing a road trip from Florida to New York but not realizing you were actually starting in Idaho. Big difference. And we want to check in on our goals because, well...they change. Our money wants to work for us and help us live a great life, but it can't do that unless we identify what a "great life" means to us.
Newsflash: It's different for each person, so keep your eyes on your own paper and really identify what fits for you. Once you know this vision, you can work backward to identify the steps you need to take with your money to make progress toward your vision. Start by listing out the pieces of your dream life that are affected by your money. Do you want to take your family on a vacation every year? If so, what kind of vacation and how much do you think it will cost? Not sure? Google is your friend to help you get ideas and a ballpark of costs. It might not sound glamorous, but the act of doing the research to obtain an estimate will actually fire you up, and those emotions are exactly what we are going for because they are the magic motivation elixir.
When we know where we want to go, we are more likely to take the steps to get there.
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Brianna Firestone is a Financial Education Instructor certified by the National Financial Educators Council, and the founder of The School of Betty, an educational platform geared towards helping people manage their money, time, and energy so they can build financial freedom and lessen stress. Her expert advice has been featured in Money.com, Real Simple, and Business Insider. Firestone received her bachelor's in theatre from Stephens College and lives in Denver, Colorado.