Money Wise Mom

Cool, you just read my last blog post building your financial house and you’re ready to “get better at money”! But what now?

Rest assured, we will dive into our first pillar, which is our spending plan, in due course. Before we deep dive into that topic, let’s set you up for success. Here are a few tips and a little bit of homework so that when we start building our spending plan, you will really be ready to go.

Set Yourself Up for Success

Your calendar is a reflection of what matters to you. If you care about fitness, you will have dedicated time for activities that make you sweat. If you care about your friends, you might have a standing monthly brunch meetup. The same is true for money. If you want to get serious about your money, you’re going to start setting aside time to deal with it.

Prep Work

1. Block out 1 hour of focus time
   
   • Pick a time when you will have the energy to focus and a place to work that is distraction free.
     
     Pro Tip #1: When planning focus time, be realistic and be intentional. Planning to dive into money stuff at 8pm on Thursday night after an exhausting day is not ideal.
     
     Pro Tip #2: Commit to focus time. Set your phone to do not disturb and shutdown your email. I have a timer on my phone called “Focus Time” which helps me remain dedicated to the planned task and pulls me out when my time is up.
     
     
   • Pick a location. Choose a quiet spot where you can truly focus. If you can access most of you financial information from a personal laptop or your phone, you might go to the library for an hour. Or, consider heading into work early one day. Or simply find a room at home where you can shut the door. The key is to find a distraction free location, just know that you will need access to your financial accounts and bills.
     
     
   • Book it in. Now let’s make it official and add it to your calendar. Call it “MWM Homework Day 0”. Do it now. I will wait.
     

MWM Homework Day 0 – Gathering Intel

You did it! You dedicated time to “get better with money”. Don’t forget to set your focus timer and let’s begin.

1. Create a worksheet. Either on a piece of paper or create a new spreadsheet.
   
2. Create a section for Income
   
   • Write down your monthly net income.
     
     • If you get a salary with a relatively stable pay cheque, you just need a recent pay-stub. Or check deposits made to your bank account.
     • If you have a variable income (tips, gig work, varying hours), I recommend that you grab your last 12 months of income (pay stubs, invoices, income transactions from your bank account). Add up the 12 months and divide by 12. This gives you a reasonable number to expect on a monthly basis.
       • You know your situation best. Your goal is pick a reasonable monthly income that you can safely expect to earn every month.
     • If you are in a household with multiple earners, jot down the income for each person separately. If you don’t know what their income is, make a follow up action item for yourself. You need to gather this information to make a spending plan for your household.
     • For many people, income from employment may be their only source. If you have other income streams (dividends from investments, rental income, government grants or programs, spousal support, etc.) add entries for these as well. If these are not regular monthly amounts, you can add up what you would have received over the past 12 months and divide by 12 to give you a monthly estimate to work with for now.
       
3. Below is the list of information you are going to gather. This is a generic list, so skip any information that is not applicable to you. For example, if you don’t own a car, you will skip “Car Insurance”. You will find this information in physical documents or digital copies.
   
   For each item in this list, add an entry on your worksheet with the monthly value. If something is paid annually, either make note of that or use the divide by 12 trick to estimate your monthly expense.
   
   • Monthly rental or mortgage payment (you likely can jot this down off the top of your head, but if you’re unsure, check your bank transactions)
   • Condo or Homeowner Association (HOA) Fees
   • Home or Tenant Insurance Bill
   • Automobile Insurance bill
   • Car loan(s) (either from a monthly statement, your original loan schedule, or the per-authorized transaction from your bank transactions)
   • Other transportation costs. For each of these ones, total up your bank transactions from the last 3 months and divide by 3.
     • Transit Costs (bus, Uber, train, metro, taxi, Lyft, Uride, etc)
     • Fuel or EV charging costs )
     • Tolls
     • Parking Fees
   • One recent utility bill for Water, Hydro/Electricity, Gas, and household Internet
   • Your last statements for all your credit accounts. Remember to include
     • Credit cards (Visa/Mastercard)
     • Retail store charge cards
     • Pay day loan statements
     • Medical debt payments
     • Personal loans (jot down the total amount you owe and what you pay back monthly)
     • A list of any buy now, pay later outstanding balances. (BNPL, Pay in 4, Afterpay, Klarna, Affirm, Sezzle, Zip)
   • A recent mobile phone bill

Stop the clock, you’re done! Give yourself a HUGE pat on the back for the amazing work! I’m very proud of you. That was a lot of deep dive work and I know gathering all that information can be daunting. Keep worksheet intel handy; we’ll be using them to build a spending plan to check if your money life is in balance.