Monday, April 30, 2012

close out

Is it just me or did this month fly by? I can't believe tomorrow is the start of May.

I have to admit, I fell back into some old habits this weekend when it came to spending. But, I recognized it (albeit after I had spent the money) and now I'm ready to get back to saving.

Let's close out April by reviewing the last few steps of Financial Literacy Month (review the other 26 days here and here).

Step 27: Understand the cost of credit. Compare the following before you borrow: Interest rate, length of loan, the total cost of the loan (including interest), credit limit, minimum monthly payment, grace period, and overdrawn & late payment fees. I would also add any pre-payment penalty (I honestly can't believe banks charge you for being responsible). Their blog also reminds you to take into consideration the psychological costs of debt, which, in my opinion, can sometimes outweigh the actual costs (it did for me!)

Step 28: Assemble a financial team. This includes a tax advisor/accountant, a credit counselor, a financial planner, and a lawyer. You may not need all of these componants, but I've heard visiting a financial planner is an expense that's well worth the cost. It can definitely help to have an objective opinion about your finances. The Weakonomist compares your financial team to a football team (helpful!)

Step 29: Appreciate the benefits. "Change may be hard, but the payoff can be priceless." MMI provides a little checklist - "If I stick to my plan, I will..." - I have every box checked off:
  • feel a sense of accomplishment
  • have less anxiety
  • build a secure financial future
  • improve my creditworthiness
  • appreciate the things I have purchased
  • avoid legal problems
  • be prepared for financial emergencies
  • feel more in control of my finances

  • I would also add "have a greater sense of self"

    Step 30: Moving forward & Reflections. Is it weird I'm kind of disappointed Financial Literacy Month is over? Even though many of the topics covered during the month were things I already knew, it was nice to review some concepts and apply them to my current finances.

    The last reflection of FLM is "What will you do next?" One of the themes I saw over & over during the month was tracking your spending, which I do... kinda, sorta, not really. So May's goal will be to jot down every expense. Whether it's fifty cents in the vending machine at work or paying my half of the mortgage, it's going down in my dollar store journal. I'm hopeful that actually writing it, instead of just reviewing it on the computer screen, will help keep my spending in check.

    Did Financial Literacy Month help you at all? I wonder if May has any kind of money theme... "Mad Money May", perhaps? Let's make it happen.

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