A good relationship with your money is always a good idea. In times of uncertainty, it’s crucial. Whether or not 2020 threw unexpected challenges at you, here are simple steps you can take to ensure financial stability moving forward.

In my second episode of “The Smart Money Gal,” I share three productive strategies I use in my own life and with my financial coaching clients.

Strategy 1: Gather Essential Documentation

Recently, I was out of town when fraudulent charges showed up on my credit card. I’ve been with this bank for years, but when I called in to report the fraud, they needed several documents to verify my identity and reverse the charges. These situations come up when you least expect it. Knowing where to find our essential documentation makes a huge difference.

Your essential documents include:

  • Birth certificate
  • Marriage certificate
  • Divorce decree
  • Bill pay logins
  • Bank account logins
  • Medical and insurance information
  • Health care directives
  • Social security card
  • Will
  • Life insurance documents
  • 401K, investment, and retirement accounts
  • Financial power of attorney
  • Medical power of attorney
  • Beneficiary designations

Hopefully, you know where your papers and passwords are, but what if something happens and your spouse or a family member has to find them?

I can’t begin to share how many times I have worked with widows or divorcees who don’t have the documents they need and don’t know the passwords to access their bank accounts online. It creates stress and uncertainty when they need it the least.

Fortunately, there is a simple solution. Gather all of your documentation and important passwords into a binder or box. Review the documents with your beneficiaries and make sure they know where to find them.

With my clients, I provide a Swan Financial binder organized and ready with dividers. My goal is to ensure you are proactive, not reactive.

Strategy 2: Cash Flow Plan

The second strategy is to take a good look at your budget or cash-flow plan. People hear the word budget, and their eyes gloss over, but it is amazing what you can achieve with a little attention on what you are spending and where. It is important to make sure you are managing your money and not the other way around.

I commonly hear from people that there is no place they can trim their budget. However, when we dive in, we always seem to find some places they can save some money.

It all comes down to priority and discipline. Figure out where your money is going, and then maybe pull out one or two things. You don’t need to give up living.

Do you go to Starbucks five times a week? Perhaps you can cut down a little. Do you love to eat out with friends? Don’t stop going out, but consider reducing the frequency.

I also run into clients who have variable income, which can sometimes cause a wrinkle in planning.  They may get a big bonus in one month, and then six or seven months go by before the next check. If you’re not sure how to plan a budget in that scenario, reach out to me. My husband and I have variable income, and I can give you a lot of valuable feedback.

This year has been challenging in many areas and many people have been forced to cut back due to circumstances completely out of their control. That’s not a happy place to be. If you take the bull by the horns and make the cutbacks yourself, you can divert money into savings. You’ll be shocked at how quickly that adds up.

Strategy 3: Set Financial Goals for 2021

What would you do with some extra money? Perhaps you would renovate your bathroom or take a vacation. When you set up a savings plan, it’s essential to have goals and reward your efforts.

The trick with savings is consistency, even if it’s a few dollars you’re putting aside.

It is all about taking small steps toward success. Set little goals. I always have one small goal and then a big one. You need to be honest with yourself about where you are and where you want to go. I can help you get there!

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