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The Personal Finance Checklist To Make Sure You’re Financially Healthy

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A few weeks ago, I attended the Millennial Week Unconference in Washington, DC. I walked away with a lot of exciting ideas for my financial coaching business. I also met some really cool people and got to hear several inspirational speakers. One of the speakers, Learnvest CEO (and my shero) Alexa Von Tobel, gave us a financial checklist to get through before starting a business.

I found this list incredibly helpful, but I also wanted to tweak it so that it can apply to anyone — not just people starting a business. It’s hard to get your money right when you don’t know where to start, so hopefully this list will serve to help anyone who’s just starting to think about taking control of their finances. Or, if you’ve had a financial hiccup, maybe seeing these steps written out will help you get back on track. Here you go!

1. Find your money

How many credit cards do you have? How much money do you owe? Where’s that 401k from your first job? How much are you actually spending every month? These are all super important things for you to know. Before you start making any financial changes, you need to know where your money currently is, and where it is going.

2. Organize your accounts

Now that you know where your money is, life will be a lot easier if you have it all in one place. Create an account on a budgeting website like Learnvest, Mint, or You Need A Budget. Link all of your accounts — credit cards, bank accounts, retirement accounts, etc. This way, you only have to go to ONE place to check up on all of your accounts. You can see if there are suspicious charges, or if you are nearing your spending limit for the month.

3. Figure out what your goals are

It’s hard to know where your money should be going if you don’t know where you want it to go. So, do some soul searching — answer some questions for yourself. These answers will help clarify what your financial goals should be. Here are some examples:

What kind of life do you want to live?

What financial issues are causing you the most stress?

Do you want to own a home?

What are the top 5 things on your bucket list?

4. Create a budget

Now that you know where your money is, and where you want it to go, it’s time to create the framework to make that happen. Your budget will outline how much comes in every month, as well as how much goes out. It will specify (based on your needs and priorities) how much you should be spending on what. You should come back to it every month and adjust as necessary. (There are plenty of budget spreadsheet resources online, and I’d even be happy to send one — email me!)

5. Make sure you’re saving for retirement

When you’re young, retirement can seem so far away that it’s not worth preparing for. But honestly, the earlier you start saving for retirement, the better off you’ll be. As they say, compound interest is your friend! If your company offers a 401k or 403b, especially if they offer a match amount, take advantage. Invest at least up to the match amount offered. If you don’t work somewhere with a retirement plan, open an IRA and start contributing now. It doesn’t have to be a lot of money! Every little bit counts, especially when you’re young. This is not something to ignore until you’re in your forties. If you’re looking for an IRA that doesn’t have a minimum initial investment, try out WorthFM!

6. Start paying down debt

If you have credit card debt, you should start paying that down. That could mean just paying a little bit more than the minimum every month at first. Slow and steady wins the race. You can’t do everything immediately. But any additional payments will make a difference, and once you’re on your way to being out of credit card debt, you’re on your way to financial freedom. (Check out the snowball method for tips on how to pay down your debt gradually.)

7. Build an emergency savings account

I am very passionate about emergency savings. This account should have 3-12 months of your expenses in it. Of course, you can’t save that kind of money over night, so you have to start small and build it gradually. Start with a goal of $1,000, since that feels more achievable than $10,000. Even if you only have an extra $25 a month, automate it to go into your savings account. Set it and forget it, and as you start to earn more (or owe less in debt), you can increase your contribution. This will protect you from unforeseen events, and give you peace of mind.

8. Get insurance

You should have any insurance that is appropriate for your lifestyle. We’re all required to have health insurance now, but there are many other types of insurance you should also be thinking about. If you have children, you should absolutely have life insurance. Do you rent your home? Definitely get renters’ insurance. It is very affordable, and can save your butt if anything bad happens to your home (like a fire or robbery). (I use State Farm in case you just need somewhere to start.)

9. NOW start thinking about investing

Retirement planning is an investment, but I have had a lot of clients ask me about investing in the stock market separately. There are several new apps out there, like RobinHood, Acorns, and ElleVest, that make investing easier for those who don’t have a ton of money to spare. I personally have been using Acorns for a few months because it’s simple to use, but that is only because I’ve already been through steps 1-8! You don’t have to worry about investing until you have paid off your credit card debt, built up your emergency savings, and prioritized retirement saving. You won’t see enough of an immediate return from this type of investment for it to be more important than paying off debt and having a savings cushion.

Am I missing anything? Are there other steps that are important to you? Let me know in the comments or on Twitter!

Maggie is a Certified Financial Education Instructor and financial coach for women. She founded Maggie Germano Financial Coaching with the mission to provide women with the support and information they need to take control of their money and reach their goals. In her spare time, she likes to go to concerts, garden, brew kombucha, and travel. Follow Maggie on TwitterInstagram, and Facebook to join the Money Circle group! For more information, or to contact Maggie directly, visit her website.

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  • Disqusoksure

    You mentioned the snowball method for paying down debt, which is great for improving cash flow in tight situations or reducing your debt-to-income ratio but considering the avalanche method is also worthwhile since it can reduce overall interest paid

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