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Unless you filed for an extension, by now you should have filed your taxes and the early birds among you may have already received your tax refund (assuming you didn’t owe, of course). Brandon and I received our tax refund back in February because we were really early birds this year. I was hyper-diligent about tracking finances in 2016 because 2015 was a mess. In 2015, I had serious issues when it came to filing taxes. It was the first year I’d made any kind of real income from blogging and I had not done nearly enough to track it all properly. For example:
- I didn’t record the value of complimentary items
- I didn’t save receipts for expenses associated with travel, food, or items related to blog posts
- I didn’t keep blogging finances separated from my personal finances
I had a whole lot of oops moments and I found myself scrambling for records at the last minute. It was not fun I tell you, not fun at all. For 2016, I was opened a checking account dedicated solely to blogging income and expenses and signed up with QuickBooks Self-Employed to track my income, expenses, and tax items. For me it was a must-have investment and I can’t stress enough how much I recommend it to bloggers, freelancers, or anyone that is self-employed in any capacity. You might be skeptical now but you’ll thank me later, guaranteed.
10 things to do for your finances this spring
Whether you are a blogger, freelancer, self-employed, or traditionally employed, it’s important to be aware of what you’re doing with your finances because you do not want to find yourself in my position from a couple of years ago. If you’re feeling like you’re a little bit off-track right now I want to help you get focused and organized, and what better time than spring cleaning? Right?
Review your statements
This is ugly but it’s really important so put on your big girl (or boy) pants and do it. Print out your financial statements for the last 90 days (yes, 90!), review them, and tag each purchase item as one of the following:
- NEED (utility bills, mortgage payment, car insurance, doctor’s visit)
- WANT (new furniture, vacuum, clothing)
- EXPERIENCE (dining out, vacation, movie tickets)
I use different colored highlighters to track mine because it’s really confrontational at the end. I mean, you can’t deny it when 3/4 of a page is highlighted in pink for WANT items. You can label them any way you’d like but however you do it, be sure to review your papers when you’re done so you can easily see where your money is being spent.
Adjust your budget
I recently wrote about a couple of reasons why your budget isn’t working for you each month and this spring is the perfect time to sit down, review your budget, and make needed adjustments.
Have there been any changes to your income? What about your monthly expenses? Are you bringing in any money through side hustles or freelance work? Are you able to allocate more money into your savings account? Review each of your budget categories to see where you could save a few extra dollars and schedule your first Money Monday.
Set up automatic savings
If you’re not already adding money to your savings account automatically each month you should set this up immediately. There are typically two ways to do this – you can have your bank automatically transfer the money once your direct deposit hits your checking account or you can split your direct deposit and have your employer deposit your paycheck into multiple accounts. I prefer the latter.
I have my direct deposit at work set up to deposit 80% of my paycheck into my checking account, 10% into an emergency fund, and 10% into a separate savings account for simple rainy day expenses. You’re far less likely to spend money when you don’t see it and this method makes the savings less visible which means I’m less likely to touch it and spend it when I shouldn’t.
Get the right tools and apps
I have a couple of tools I use on a regular basis to help manage our finances – QuickBooks Self-Employed, Mint, Dubsado, and LearnVest are four of the ones I use every month. It’s not really as complicated as it may seem having four financial tools because two of them (QuickBooks and Dubsado) are for my blog work while Mint and LearnVest are personal for our family. It breaks down like this:
- Dubsado for contracts, invoices, and payments
- QuickBooks for business/blogging accounting
- Mint for family budget tracking
- LearnVest for managing investments and a financial plan
I also keep the QuickBooks and Mint apps on my phone so I have all of my bank and accounting information available to me at a glance and on demand. Whatever financial tools you use each month (and if you don’t use any you should check out the ones I mentioned above) make sure you have them all up to date and synced with one another (as much as possible) so the process of updating your financial records is as effortless as possible.
Evaluate your family trust, life insurance, and/or will
A lot of people overlook this, especially when they are young, but these are super important and you’re never too young to get started on them. If you have any assets at all or if you have any dependents, you at least need life insurance and a will. You can usually overlook a family trust for a while if you don’t have dependents and a lot of assets but always speak to a trust advisor.
We don’t have a family trust but we do carry life insurance policies and have wills for our assets. We also have power of attorney documents drawn up just to be extra clear in the event of any major medical decisions, etc. This spring take a look at your life, your income and assets, and what preparations you have for “worst case” scenarios. If you hire the right people to help you these processes aren’t complicated and they are extremely important.
Review your beneficiaries
If you have a trust, life insurance policy, investments, etc. review your paperwork and make sure that your beneficiaries are up to date. I remember once, years ago, I had set my then-live-in-boyfriend up as a partial beneficiary for my life insurance policy. My mom was an 80% beneficiary and he was a 20% beneficiary just because I split living expenses with him and that was enough to cover things for a while. Well, we split and it was a whole year before I realized he was still on my policy!
Review who you have set as the beneficiary on your investments, finances, insurance policies, etc and update the information as needed. In a lot of cases you can designate multiple beneficiaries and assign a percentage of the inheritance to each person.
Organize Your ICE
This is one of the things my mom stresses to me all of the time. ICE stands for “in case of emergency” and it’s important to have a record of your ICE contact, records, and pertinent information. Before she retired, my mom worked as a paramedic and if they ever needed to contact someone on behalf of a patient she would look for an ICE contact in the patient’s cell phone or look for a ICE envelope in the glove box (bonus tip: set up a ICE envelope in the glove box of your car! It should include any allergies you have as well as your name and emergency contact’s name and phone number).
Your ICE as it relates to finances should be an emergency folder that includes your bank account records, investment records, monthly bills, credit card records, life insurance policies, online user names and passwords, etc. I recommend locking it up somewhere nice and safe because this is highly sensitive data and you do need to take steps to protect it.
Consult a financial advisor
I probably should move this up in this list because this is really, really, really important especially when we’re talking trusts, life insurance, investments, beneficiaries, and distribution of assets and wealth. A good financial advisor can not only help you make intelligent decisions for the present in order to help you grow your wealth but they can help you create long-term plans and develop a strong asset management program for the future.
You can then rest easy for a while knowing that you have a plan, you’re on track, and your family is protected should something terrible happen to you.
Review your retirement goals
Since we’re talking long-term, let’s talk retirement. OMG…I know. For a lot of people it feels like it’s so far away but time has a way of flying by and before you know it’s you’ve wasted 5 or 10 years and haven’t invested a dime into your retirement accounts. I started investing into my retirement plan at 22 but I know a lot of people in their early 30’s who are just getting started and are having regrets.
If you don’t have a retirement plan, you should consult with a financial advisor about your options and create a plan to get started ASAP. You’ll want to look at 401k’s, Roth IRAs and IRAs, as well as individual investments into stocks and mutual funds. A great resource for long-term financial planning is LearnVest which Brandon and I use to manage our financial plans that aren’t handled through my employer.
Check your credit score
I actually recommend checking your credit report and your credit score every 4 months. At annualcreditreport.com you can request a copy of your credit report once a year. The catch is that you can request your report from each agency (Experian, Equifax, TransUnion) once a year so you can actually request one copy every 4 months. I request one report every 4 months (April, August, December) so that I am always up to date and aware of what is being reported and I can quickly and easily dispute anything that is inaccurate. If you don’t want to do it 3x a year, at the very least do it 2x a year.