It’s Time to Give Your Finances a Checkup - Service First Mortgage

Every now and then we all need to check in on our personal finances.

Over time we take on new subscriptions, forget about others, and maybe change our spending habits. That’s why it’s important to give yourself a checkup to see where your money is going and if you should make any changes.

What areas should you focus on? Here’s my list:

Audit your monthly bank statement

When you see your statement in your mailbox or inbox, don’t look past it. Instead, take some time to go over it and look for any errors or recurring charges that you might want to cut. Reviewing the past month’s activities can give you good insight to where your money is going.

It doesn’t take that long and it’s not a bad idea to make it habit each month.

Budget your income and expenses for the next 3 months

Having a budget lets you make a plan and gives you a clear picture of where you money is going. This is where you’ll really see where you can get rid of recurring costs and subscriptions you don’t need.

If you can, I recommend budgeting out 3 months in advance, but there’s nothing wrong with maintaining your budget monthly. The most important aspect is making sure you know your spending habits and have a plan to make sure it’s going towards the right things.

Evaluate your debt

Take a look to see if your total debt increased or decreased in the past year. Next, I would recommend outlining your balances and making a game plan on how you can pay them down. For instance, if you have credit card debt, start paying it off by tackling the smallest balance first.

From there, work on the next largest balance. And so on and so forth. Being able to check off debt from your list will make you feel good and give you the motivation to keep going.

Check on your savings

Your savings is your safety net, so it’s important you keep making it stronger each month in case of an unforeseen emergency or expense. A good rule of thumb is to have 6 months’ worth of expenses saved up just in case.

I know saving up 6 months’ worth of expenses sound daunting, but having a system in place can help make it much easier. Revisit your budget to see what you can change so that you can give your savings a boost.

Take advantage of your 401k

If you are participating in your company’s 401k program, make sure you’re using it to its full potential. Take advantage of your company’s match because that is free money you can put towards your retirement. Also, don’t forget to raise your contribution amount every year and especially if you income increases.

I also recommend periodically reviewing your investment elections to make sure you’re getting the return you want.

Evaluate your mortgage

With the market being the way it is, it’s not a bad idea to take a look at your current mortgage to see if you would benefit from refinancing to a 15-year loan. Not only does it help you own your home free and clear quicker, it also helps you build equity and save quite a bit on interest.

Now I know everyone won’t be able to check each one of these off their list. However, they are great goals for you to strive to meet.

Do you think I have missed any steps?

If you have questions or need a recommendation, let me know. I would love to help.

About the Author

John Donnelly is an Executive Director of Sales for Service First Mortgage and is a Vice President of the company. He holds over 20 years of experience in the mortgage industry, in a variety of roles including Loan Officer, Producing Branch Manager and Vice President of Branch Operations. He joined Service First Mortgage in 2009 as a Regional Manager and earned Regional Manager of the Year in 2011 and 2012. In 2013, he received the designation as one of the 40 Most Influential Mortgage Professionals by National Mortgage Professional Magazine.

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