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How To Take Inventory of Your Financial Life That Won’t Be Boring

4 min read

Reinventing midlife can feel like a beautiful time of self-discovery mixed with doses of self-doubt, especially when it comes to your finances. If the thought of budgets, spreadsheets, and math makes you cringe, you’re not alone. To get to where you want to go, though, you need to know where you stand now.

Your starting place is taking an inventory of your financial life, and guess what? It doesn’t have to be boring; let’s explore how to make it fun and why it might help you move forward.

Making a financial ‘date’ with yourself

Many women find themselves starting their financial life over in midlife due to circumstances out of their control. Feelings of self-doubt are perfectly normal and nothing to be ashamed of. This is probably the most challenging time for many of us. However, when we feel better about ourselves, we feel better equipped to address our finances.

Financial self-care and personal self-care go hand in hand. Make a financial date with yourself and put it on the calendar to honour your commitment to you. If it’s not planned, it won’t happen. What does that look like? It could be a long bubble bath, followed by slipping into your comfy bathrobe, a cup of tea, a candle that brings sweet memories, a plate of your favourite snacks.

Now it’s time for your net worth

It’s time to start gathering some things between now and then because we will put together two essential documents. The first is a financial statement called a Statement of Financial Position. Stay with me, OK?

Whether you have beautiful file folders that are neatly organized for all your documents or you’re not exactly sure where all your documents are, it’s perfectly OK.

What is a Statement of Financial Position? It is pretty much what it says. This is a document that tells you where you are now, your net worth. It’s your ground zero starting point in knowing where you stand financially. Remember, we can’t move forward until we know where we are now.

To keep it simple, there are two main categories; Assets (everything you own) and Liabilities (everything you owe).

Assets can be divided into three subcategories
. The first is easily accessible money typically found in a checking, savings, or money market account. The second is invested assets: retirement accounts, individual stocks, and any investment that can not be quickly withdrawn. The third is what we call personal use assets. These are your personal residence, your automobile, jewellery, perhaps a boat, your grandmother’s antique china, and any personal things you own of value.

Liabilities include a mortgage, credit card debt, auto loan, student loan, personal loan, or other debt obligations.

Now, take a bite of chocolate because we’re going to put this together. If spreadsheets make you cringe, head over to your local craft store, and purchase a couple of sheets of beautiful scrapbook paper, preferably with lines.

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All you’re going to do is list all of your assets on the left side, all your liabilities on the right. Total each column, subtract what you owe from what you own, and voilà! You now have a net worth statement.

Cash flow is good to know

Now, it’s time to figure out how money is flowing every month. This is called a Cash Flow Statement. This tells you how much is coming in and how much is going out. The difference between this and the net worth statement is that cash flow also includes taxes, interest, dividends, child support, etc.

Whether it’s a spreadsheet by candlelight or that beautiful piece of scrapbook paper you bought, let’s put this cash flow statement together. One one side, list all the money that comes in every month. This includes gross income (before taxes), interest or dividends from investments, child support or spousal support, and any additional monies that you collect every month. In the other column, list all money that goes out every month; mortgage or rent, auto loan payment, food, utilities, phone, entertainment, income taxes, insurance.

Remember that some of these outflows, like groceries, utilities, and entertainment, will vary from month to month. That’s OK. What you can do is look over the previous 12 months for a total and divide by 12 to get an average for each month.

Knowing what is coming in and going out every month, especially with outlaws that vary, will help you make adjustments where needed.

These two pieces, net worth, and cash flow are your starting point. They are your foundation to know where you stand now to determine how you want your lifestyle to move forward. Now, congratulate yourself and celebrate! You deserve that glass of wine.

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About The Author

Patty Bonsera - Financial Therapist

Expert Patty Gale | CrunchyTales

Patty is the Founder of Fear.less Girl Financial, a personal finance boutique offering heart-centered money coaching and financial life planning for midlife women seeking, “What’s next?”. She picks up, where mainstream financial services leaves off, to bridge the gap between the emotional and practical in helping women shift how they see their relationship with their money. Patty believes money stories are not a taboo topic and she is passionate about changing the narrative of the discussion and removing the stigma.

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