Back to…A Better Bottom Line

The “lazy days” of summer are over, vacations are done, the kids are back to school, and it’s time to get back to routine. As a mom of four, believe me that I understand the stress of September and how parents can easily lose themselves with the focus on getting the kids back to a manageable routine. So, this September, we wanted to provide a series of ideas and strategies to make sure you are going “back to school” while also getting “back to you!”

We’ve shown you ways to get back to a healthier mind, fitness and healthy meals. This week, we turn the focus to your finances. Summer tends to be a time for splurging on vacations, day trips, dining out and other things that can add up. Expenses like increased child care and the cost of day camps can also throw your budget out of whack. Taking an hour or two to sit down and look at your finances is a great activity to do now as your summer spending has subsided and you start to prepare for the upcoming holiday season.

Here are 5 tips to help you get back to a better bottom line:

1. Set Goals: It’s extremely important to have financial goals! Without a goal there’s nothing to concrete to work towards. Categorize your main goals into short term (immediate – 2 years) and long term (5-10) years. If you know you want to take a vacation each year, figure out the cost and how you will save for this. Or if you want to be debt free in 5 years, figure out how much you need to pay down each month to make it happen.

2. Assess the Situation: It’s impossible to know how to you can reach your financial goals if you don’t know what is going on. It’s important to examine your finances each month. Create a statement of net worth looking at your assets and liabilities and track your monthly spending. Using a service like Quickbooks or can simplify this process for you! This will also help you to address wrong bill charges or credit card mistakes quickly to prevent unnecessary charges from accumulating.

3. Create a Monthly Budget: Creating a budget based on your income vs. fixed and variable expenses is important. Fixed expenses include things like mortgage or rent, taxes, utilities and bills that occur every month. Variable expenses include things like clothing purchases, gifts and entertainment.

4. Compare: After a month, compare your projected budgeted spending to your actual spending and see where any discrepancies lie. You may find out that many of the things you are purchasing can really add up!

5. Change your Habits: If you find after all your assessing that you are spending more than you are making, or that you are not saving as much as you’d like, it’s time to make some change. Look first to your variable expenses and assess where you can cut back. Do you really need that coffee you buy each day or could you save by brewing your own? Why are you paying so much for cable when you don’t watch half of the stations available? Can your cell phone bill be lowered? Is there a cheaper store where you can buy your groceries? There are always options to lower your expenses, but you need to know what your expenses are to make some decisions!

Often, to make positive changes to your financial state, you may have to make tough choices and ultimately give up something you enjoy. We recommend enlisting the help of a financial advisor who can help you to plan, budget and reach the goals you set.