30 Day Money Cleanse – Week 1: Awareness

in Financial Planning, Retirement Planning by

Much like your physical health, your financial health needs a check-up every once in a while. Here at Personal Capital we’re announcing a 30-Day Money Cleanse.

Are you meeting your money goals? Or do you feel like you have to choose between your priorities? Whether you’re saving for a home or planning to retire soon, it’s possible to achieve your goals with just a bit of awareness and careful planning.

During this challenge, we’ll teach you how to invigorate your finances in 4-parts and invite you to take 1 simple step each day for 30 days.

First we’ll talk about awareness, then how to focus on your financial priorities by taking advantage of your options, how to rev-up your plan by putting it into action, and finally how to future-proof your money. In no time you’ll know your finances like the back of your hand, create habits that are critical to sustained wealth creation, and make your money work for you.

Day 1 – Track Down Your Money

List all your financial institutions and your username/password to access them. And I mean all. Banks, credit cards, debt, investment accounts, 401k, IRAs, 529s, all of it. You’ll never have a chance at getting your financial life in order – much less improve it – if you don’t know where you are now.

Day 2 – Identify Your Financial Goals

Make your goals time-bound and concrete: “I want to pay down all credit card debt within 4 months” or “I want to retire at 50 with $2M saved.” We all have goals and whether you’re paying down debt or saving for a home it’s important to set a date and make a plan. Without clear guidelines forward, it’s far too easy to overspend on discretionary items as well as miss opportunities for wealth creation.

Day 3 – Use an Aggregator

There’s no need to make things harder for yourself than they need to be. Use Personal Capital or Mint.com to see at a glance your spending by category to identify where you spend the most.

Day 4 – Know How Much You Make

When it comes to your money, knowing rough estimates isn’t doing you any favors. Not putting that money to work in investments or your retirement accounts means you’re leaving opportunities to grow your wealth on the table. Check your pay stub and see how much you actually take home after taxes, health insurance, etc.

Day 5 – Know How Much You Spend

Automatically bucket expenses into categories (e.g. insurance, debt payments, rent/mortgage, groceries, or discretionary spending like clothing or dining out). It pays to know how much of your money goes where. You might find that dining out is costing you hundreds more dollars a month than you intended.

Day 6 – Prioritize Your Spending

Rank all of your discretionary items from most to least important – if you’d rather dine out than shop for clothes, your ranking should reflect this.

Day 7 – Calculate Savings

Now that you know how much you bring home after taxes and insurance every month, put that extra capital to work! Subtract your monthly spending from your monthly income. Add that total to any retirement plan contributions (e.g. a 401k) so you see how much you can save. Over time, allocating leftover sums of money over time can mean the difference between traveling during retirement or owning a second home.

Check out our entire Money Cleanse Series:

This communication and all data are for informational purposes only and do not constitute a recommendation to buy or sell securities. You should not rely on this information as the primary basis of your investment, financial, or tax planning decisions. You should consult your legal or tax professional regarding your specific situation. Third party data is obtained from sources believed to be reliable. However, PCAC cannot guarantee that data’s currency, accuracy, timeliness, completeness or fitness for any particular purpose. Certain sections of this commentary may contain forward-looking statements that are based on our reasonable expectations, estimate, projections and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance. Keep in mind investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

The following two tabs change content below.
Michelle Brownstein, CFP

Michelle Brownstein, CFP

Michelle Brownstein is the Senior Vice President of the Private Client Group at Personal Capital. She is a Certified Financial Planner with a wide range of Investment Management experience.

14 comments

  1. ronald dorchester

    easy to say hard to do when you live paycheck to paycheck

    Reply
  2. sue levy

    I’m trying to use program but can’t log in

    Reply
  3. Lisa Clivip

    I work in education and I have a state retirement plan no 401k. The 403b plan we have at our district is very limited to mostly annuities that carry high fees. It is very frustrating for me to read article after article about maxing out your 401k because there are many of us especially in public service that do not have that. The needs of public employees are rarely mentioned in any articles. In addition most of the articles I read assumes that you are making six figures. I work in a very rural school district in NH and last year my gross income after my pretax deductions for retirement, health insurance, and NEA dues was $49500. I am 54 years old and o have been a guidance counselor for 14 years and I have a masters plus an extra 30 credits beyond my masters. Why are articles rarely geared to this type of income when a lot of us don’t make big bucks because we are in a service oriented field and I have never made big money. Is there advice about how much to save for retirement in addition to the state pension plan which is a fixed amount based on years and salary and social security. To make matters more complicated I am recanting divorced and currently on disability but my goal is to return to work. What about prions like me who live pay check to pay check? I also have s daughter on college. I wish that more of the investment advice would take into consideration the millions of people like me who way out number the ones with big bucks. Like given my situation would it be better to open a regular IRA or a Roth IRA? I pretty well versed in a lot of the financial lingo and basics snout an emergency fund, paying down debt, saving for retirement before college. The problem is like many people in my income bracket with two kids, one just moved out our emergency fund rarely exceeds $2000 and that is when it is good. I think I have made my point. We need financial advice probably even more than the high wage earners. Please try to be cognizant of the fact that many of us do not fit the profile that is often described in investing and it is extremely frustrating and we are just left to figure it out on our own because we don’t have a “portfolio” or cannot afford the minimum contribution which you need to access the Vangaurd 500 index fund. Which as you know had extremely low fees and it is an easy way to diversify within one account. I know what I am talking about it’s just hardly any of the financial articles are geared towards people like me. The basic middle class. Thank you for reading this. I am also very aware of all of the new ways to invest with the new robo advisors like Betterment, Personal Capital, Wealthftont etc as well as acorns and digit. Having all of these choices without much advice makes it very confusing to make good solid financial decisions. They all have their positives and negatives. Maybe I should start to write a column for people like me. I’ve done s ton of reading and research. Just no professional advice. We can’t afford that.

    Reply
  4. Lisa Clivio

    I just sent a long post but realized I spelled my last name wrong due to the tiny keys on a phone. My band is Lisa Clivio. Not with the p that got submitted. Thank you.

    Reply
  5. Me

    I cannot open the weekly lessons.

    Reply
    • Tamar Kuyumjian

      Tamar Kuyumjian

      Hi there – each week’s blog post is hyperlinked and bulletted out at the top and bottom of each article. If the links don’t take you directly to that week’s blog post, try checking your browser for pop-up blockers. Thanks!

      Reply
  6. Me

    Now I downloaded app, emailed course to friends and I still cannot find the course. Come on and make this easy. What good is this course that does not seem to exist.

    Reply
    • Tamar Kuyumjian

      Tamar Kuyumjian

      The 30 Day Money Cleanse comes in a 4-part blog series, there is no course to download – simply follow the steps per each day!

      Reply
  7. Commodity tips

    The article show perfect retirement planning management for the best experience in retirement .

    Reply
  8. goldcruderesearch

    Great collection of blogs for anyone looking to get into investing! Thanks for sharing

    Reply
  9. profit street

    Thank you for such nice & informative blog. This blog is Must Read for financial planner

    Reply
  10. Adviser Street

    you have very nice collection ,all publishing news are very usefull .thanks for sharing the information …

    Reply
  11. munir khan

    Great skills with good ideas. very appreciable work

    Reply

Leave a Reply

Your email address will not be published.

Disclaimer. This communication and all data are for informational purposes only and do not constitute a recommendation to buy or sell securities. You should not rely on this information as the primary basis of your investment, financial, or tax planning decisions. You should consult your legal or tax professional regarding your specific situation. Third party data is obtained from sources believed to be reliable. However, PCAC cannot guarantee that data's currency, accuracy, timeliness, completeness or fitness for any particular purpose. Certain sections of this commentary may contain forward-looking statements that are based on our reasonable expectations, estimate, projections and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance. Keep in mind investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.