Amy got on our first Skype call together and said, “I want you to know that I have a pretty good handle on my finances. The only reason I wanted to talk to you is because I don’t know if I’m doing well or not.”
We’d have to talk more in order for me to know what she meant by “pretty good handle.” And to know whether she was “doing well or not,” we’d need to know relative to what …
I decided to walk her through a simple checklist I use in order to know where to start a conversation.
And I thought it might be useful to share it with you, so you can figure out just how proactive you are with your finances.
Why would you want to do this? Because a lack of clarity around your finances leads to anxiety and strain—and they in turn touch every aspect of your life. Regardless what your financial situation is, ignorance is not bliss. Knowing exactly where you stand gives you the power to do something about it.
Just imagine how good you’d feel if you weren’t worrying about your money!
Instructions for the First Line: Pertains to You
Each statement on your Financial Report Card (below) has two lines before it. The first line is the “pertains” line, meaning the statement pertains to you.
Statements that pertain to everyone will all have an “x” on the first line.
Conditional statements (“If I …”) will have the first line left blank. If the “condition” pertains to you, put an “x” on that first line. It’s easier than it sounds; you’ll see when you look at the statements.
Instructions for the Second Line: You’ve Achieved This
For every statement that has an “x” on the first line, read the statement and decide if it’s something that you have already achieved. If so, put an “x” on the second line. If not, leave the second line blank.
Your Financial Report Card
_x_ ___ I know how much I spend on my monthly bills.
_x_ ___ I know how much my income is each month.
_x_ ___ I know how much debt I’m carrying.
_x_ ___ I know how much I owe to each creditor.
_x_ ___ I know how much interest I’m paying each creditor for my debt.
_x_ ___ I am current on all my debt repayments.
_x_ ___ I have six months of living expenses set aside for emergencies.
_x_ ___ My emergency savings are in easy-access, liquid form.
_x_ ___ I have an automated savings or investment plan in place.
_x_ ___ Part of my income is deferred in long-term retirement accounts.
_x_ ___ My savings accounts have specific goals (retirement, home, boat).
_x_ ___ I can easily put my hands on all my critical financial documents.
_x_ ___ I know my net worth (all my assets minus all my liabilities).
_x_ ___ I understand all the investments in my investment portfolios.
_x_ ___ I do annual reviews of my investments with an advisor I trust.
_x_ ___ I have at least one credit card in my name only.
_x_ ___ I have an updated will.
_x_ ___ I have health insurance.
_x_ ___ I have reviewed my will in the past 12 months.
_x_ ___ I have reviewed my insurance policies in the past 12 months.
_x_ ___ I have clearly defined short, medium and long-term money goals.
___ ___ If I have debt, I have a plan to get out of it.
___ ___ If I’m a renter, I have renter’s insurance.
___ ___ If I’m a homeowner, I know the value of my home today.
___ ___ If I’m a homeowner, I know my mortgage balance.
___ ___ If I’m a homeowner, I know my mortgage interest rate.
___ ___ If I’m a homeowner, I know the equity in my house.
___ ___ If I’m a homeowner, I have homeowner’s insurance.
___ ___ If I have dependent children, I have life insurance.
___ ___ If I have school-age children, I’m saving to help with college.
___ ___ If I’m a critical money earner, I have disability insurance.
___ ___ TOTAL ‘Xs’ IN EACH COLUMN
(My thanks to Galia Gichon for the original concept behind this financial checklist.)
Calculating Your Achievements
When you’re finished, count the total of “Xs” on the first lines and write in the TOTAL.
Then count the total of “Xs” on the second lines and write in that TOTAL.
Divide the total for the second line (achieved) by the total for the first line (pertains). The result will be the percentage you have achieved.
What Do Your Financial Report Card Scores Mean?
The most obvious answer is that you want to get as close as you can to 100%. But there are no good or bad scores.
Instead, look at your score. Then look at the items that you did not mark as “achieved.”
Make a list of what items you still need to achieve and work them into your financial goals for the months to come. Work on one at a time so you don’t overwhelm yourself.
You might want to print out this form (or bookmark the page) and come back once a month to see how you’re doing.
Here’s to your growing success in gaining control over your finances!
Let us know in the Comments section below if you think this kind of Financial Report Card can be useful to you.
READY TO STOP WORRYING ABOUT YOUR MONEY?
I’m relaunching my “5 Calls to Financial Clarity.”
One-on-one with me. (Plus lots of hand holding.)
In five calls, you’ll know where your major sticking points
are with money. And what to focus on.
You’ll know how you’re spending your money.
You’ll have a viable short-term and long-term spending plan.
And you’ll know your net worth so you can keep tabs on how well you’re doing.
Best of all, you move as slow or as fast as you like; it’s up to you.
All that for a one-time investment of $247. Sound interesting?
If you want in, contact me so
we can discuss the details and free you of financial anxiety!
Hope you’re ready!
Bio: Sharon O’Day fixes financial lives. She is a tell-it-like-it-is money expert with a successful career in global finance, plus an MBA from the Wharton School. Today she specializes in getting entrepreneurial women over 50 back on their game so they can have more money, less stress and more joy. With her “Over Fifty and Financially Free” strategies, they take actions that lead to their ultimate goal: financial peace of mind.