Where does your money go each month? Now, especially, with financial goals and priorities in flux, it’s important to know in granular detail.
We asked financial experts to weigh in on how to make the best of extra time in quarantine to tune up your finances. If you don’t even bother to open and look at your bank statement when it arrives each month, these tips are for you.
“Doing that holistic inventory of your financial life helps you identify where the most pressing needs are and what you need to be focusing on,” Ms. Rodriguez said. A credit card with a large balance and a high interest rate might take priority. Or maybe it’s time to create an emergency fund.
Douglas A. Boneparth, the president and founder of Bone Fide Wealth, a financial planning service, encourages people to look at the last year of statements through the online archive of credit card and bank account statements. “It’s very hard to make changes unless you actually know what you’re spending money on,” he said.
Mr. Boneparth categorizes expenses into buckets: housing, day care, entertainment and utilities, for example. Apps can help. Mint gives a visual snapshot of where your money goes, Pillar tracks expense data and Personal Capital provides a bigger picture of net worth by tracking spending, investments and your retirement fund.
Ms. Anat said she has seven accounts. Six with Charles Schwab, which offers no-fee banking — for cash for investing each month, therapy, vacation, two joint accounts with her partner to pay household bills, a “landing strip” where all the money comes in and is reassigned — and a savings account for emergencies with Capital One.
“The more that we can put our eyes on our budget, the better,” Ms. Love said. In using cash, “what you have left to spend is sitting right in front of your face.”
Cut back on subscription services
Confined to home, our needs have changed. Netflix is essential; gym memberships, not so much. Many things we used to pay for can be found for free or at a lower cost. Apps like Charlie, Trim and TrueBill can help you identify and cancel subscriptions.
Kiersten Saunders the co-founder of rich & Regular, a personal finance blog, in Atlanta found that her fitness apps are now redundant. “If I take a little more time and plan out a week’s worth of workouts, I can find fitness leaders on Instagram to piece together a plan rather than paying for something highly curated,” she said.
Other subscriptions can be downsized. Many libraries offer free video streaming services like Kanopy that could replace a service you pay for. You might make the decision to cut back to a lower tier of Hulu and watch ads.
Get on the phone and negotiate
No one loves a phone call with a lender, but calling just once can help you save. Ms. Saunders recommends calling credit card companies, insurance providers and lenders. “There’s been a lot of provisions with the CARES Act where you can defer a payment without having a negative impact on your credit report,” she said, “but the creditor has to agree to that.”
To frame the conversation, Ms. Love recommends being direct: “Come out and say hey: this is my situation. I’m having a hard time making payments. Is there any way you can lower my interest rate?” she said. “It just takes one phone call.”
The most important thing to remember is that money management is a lifelong practice. “It’s not something we do once and we’re done,” Ms. Rodriguez said.
