Don’t wait for a stimulus check: 5-day money challenge


Stimulus checks printed at the Philadelphia Financial Center in Philadelphia.

Jeff Fusco | Getty Images

Many Americans are waiting for their second stimulus check and others want to know when they could possibly get a third payment. 

The $1.9 trillion Covid relief plan pushed by President Joe Biden includes a third round of  $1,400 stimulus checks to bring the $600 payments Congress authorized in December to $2,000. Yet lawmakers ultimately may not necessarily agree on that sum, and it could take several weeks for Biden’s proposal to work its way through Congress. 

So the wait continues. 

That doesn’t mean you stay on the sidelines when it comes to your finances. Try this 5-Day Money Challenge. Here are five simple steps that you can take now to get a better handle on your money, whether another stimulus check is on its way or not:

Day 1: Calculate your net worth

The first step to taking control of your money is to figure out where you stand right now. Once you get info on all of your accounts, it’ll take just a few minutes to calculate your net worth.

“Looking at your finances in totality is very important because everything is connected,” said Zaneilia Harris, a certified financial planner and president of Harris & Harris Wealth Management Group in Upper Marlboro, Maryland. 

Add up how much you have in checking, savings, investment and retirement accounts, plus the estimated value of your house or other properties you own. Then, add up the value of your liabilities, your debts —credit card balances, student loans, mortgage, car loans — other bills that you owe. Where your finances currently stand lies in the answer this equation: assets – liabilities = net worth.  

Day 2: Do a ‘paycheck checkup’

Day 3: Do a budget makeover

If you’ve never done a budget or haven’t looked at it in several months, it probably needs a makeover. Make sure it reflects your immediate financial goals, which may have changed. “Look at how you’ve handled money in the past and your cash flow in the past and then assess if certain things are even necessary,” said Harris, author of “Finance ‘n Stilettos – Money Matters for the Well-Heeled Woman.”

Prioritize what things are necessary now. Some things may not be as necessary as you thought,” she added.

Focus on what you must spend on basic needs as well as long-term plans. “That budget shouldn’t be all about restriction,” said Emily Shallal, senior director of customer strategy and innovation at Ally Bank. “It’s a tool to help you make financial decisions so you can be more confident and satisfied with your money.” 

More from Invest in You:
The ultimate side hustle guide for 2021
Credit card fraud will increase due to the Covid pandemic, warn experts
How 2020 college grads have been launching their careers during the pandemic

Try the “60% Solution.” Put 60% of your gross income to “committed expenses” — that includes all of your taxes, housing costs, transportation expenses, debt payments, childcare and any expense that you must pay every month. Divide the rest of your “spending” this way and pay yourself. Put 20% of your gross income toward long-term savings (including college and retirement savings), 10% to short-term savings (including your emergency fund) and 10% to “fun money” to use on anything that you’d like.

Day 4: Direct your pay to several accounts

Day 5: Set up alerts on your bank’s mobile app 

Customize banking alerts on your bank’s mobile app to help you manage your money. You generally can request to be contacted by text or email. Alerts for a direct deposit, low balance or large purchase can be particularly useful. 

You know when your pay is in your account or your bank account balance is below the amount you need to cover this week’s or this month’s expenses. And, before each large purchase, you may ask yourself “Do I really need this item? Or “Do I just want this item?” But as another gut check, a “large purchase alert” will contact you when a significant amount of money, say $100 or $200, is spent at one time. 

The ultimate goal of taking the 5-Day Money Challenge is to move your financial life forward right now. “Look at ways that you can move forward in a positive way,” Harris said. “Those small steps lead to the big steps.

“Breaking it down into smaller steps or habits will help you start to look at your finances more regularly and connect those steps and habits to things that are very important to you in your life.”

And, you don’t have to wait for that stimulus check to get started.

Source link

Products You May Like

Articles You May Like

Where can digital nomads work? Croatia, Dubai, Estonia and tropical islands
Domino’s Pizza (DPZ) Q4 2020 earnings miss projections
Nuclear power will ‘absolutely’ be politically acceptable
DraftKings (DKNG): Q4 2020 earnings
Use the 1% marginal gains rule, says performance expert

Leave a Reply

Your email address will not be published. Required fields are marked *