Are you one of those people who hates managing and discussing finances? My mom and best friend are both like that. Avoidance is their favorite strategy, and they would rather stick their head in the sand like the ostrich, and just wait for that conversation to pass.
If you have someone else you are in a relationship with, that likes to deal with the money, or at least agrees to do it, you might think that is a free get out of jail card. And while it might be a little, it’s certainly not a free pass. Everyone needs to know the basics of their financial situation
AT ALL TIMES. Read that again.
What if, as you read this, some crazy freak accident were to happen and you would never again be able to speak to your significant other? Would you know where your money is at? How to access it? Who to call and what to do?
If any of these questions momentarily give you pause, it’s time to clarify a few things. Right now, a friend of mine recently found out her husband is planning to divorce her. She has not looked at their finances in who knows how long. She doesn’t know how or where to log in, how much is currently in their possession or what half would even look like.
LESS THAN 15 MINUTES COULD CHANGE YOUR FINANCIAL FUTURE
I am not saying freak accident or surprise divorce are in the cards for you. I am saying it takes less than 15 minutes for some basic questions to be answered and it DOES NOT need to be hard, detailed or stress inducing. This can be a large pink post-it note if that feels easier.
3 THINGS TO KNOW AT ALL TIMES
- WHERE DO WE BANK
- WHAT DO WE HAVE THERE
- HOW MUCH (BALLPARK) IN EACH
This is not an exercise in perfection. What’s that quote? Don’t let perfect stand in the way of good? Or something like that. Knowing something is far better than nothing.
SAMPLE (to be looked at every 3 months or so)
Chase-Checking ($5,000) and Savings ($25,000)
Ally-CD ($75,000)
Vanguard-Investments ($125,000)
Now you may be looking at that, and think you want that type of $$$ and since you don’t have it, this little exercise is not for you. That would be incorrect. Regardless of what the amounts are, it is extremely important to have a loose understanding of how much and where. You might be looking at my 3 line list, and think, “My list would be 17 lines if I did this” and that is important to know also. If you have so many places you keep your money, you now have so many places you need to manage and keep track of. That sounds tiring, exhausting, and in general, most people don’t love things that fall in those buckets. Money is way easier to deal with when you keep it simple, and don’t overcomplicate things.
PARTING THOUGHTS
Accounts where money sits can easily be forgotten about, hidden, or just missed altogether. It takes 5 minutes every 3-4 months to validate if your previous list is still mostly right, what the new/different balances are, and if there are accounts that need to be added or changed. You don’t need to know the specifics (i.e. types of investments, etc.) Lots of details make things feel overwhelming.
At this point, you are just loosely understanding, so if some surprise event happens, it feels a little less surprising.
Do you have a favorite tried and true system that you love (or hate) to keep tabs on your money? Share them with us below!