Our relationship with our finances is one of the most practical and life-impacting relationships we have. And, as with any relationship, it’s important we stop and assess the partnership dynamics. We need to regularly check-in to ask ourselves how we feel about money, what we get out of it, and what we hope to ultimately achieve with it.
In other words, it’s important to do a regular financial self-assessment. But don’t feel too bad if you haven’t done one yet. In a recent study by Prudential Financial, called the Financial Wellness Census™, the insurance company found that a staggering one-third of Americans don’t have an accurate handle on the state of their own finances—and they often think they are better or worse off than they actually are.
This is why it’s so important to have “money dates” with yourself on the reg. It’s when you can check in on your finances, assess your “status,” and figure out your next steps.
Here’s how you can start.
During your money date, ask yourself the following questions:
Ask: What are you looking for right now?
Are you having fun? Enjoying things one day at a time?
Needless to say, everyone’s financial situation is unique. So, don’t feel bad if you’re going through a situation where your financial goals are just focused on the here and now. Sometimes you need to put in place short-term money goals to get through a bind (like losing a job, managing a healthcare expense, or moving into a new place).
Even if you’re not in a financial tough spot, during your money date it’s important to ask yourself what you want to get out of your money on a regular, daily basis. Does it mean having enough in your account to not stress over your daily latte-buying habit? Does it mean having enough in the bank for that killer new handbag or travel destination? Or, are you looking for ways to save for a particular goal like a wedding or grad school?
Understanding and clearly writing out what you want to accomplish in the short-term will help you tweak your spending and savings plans accordingly.
Ask: What do you ultimately want from money? What’s the end goal?
Be honest with yourself. Are you okay if things don’t change? Where do you see yourself in one year, five years, or 10 years down the line?
For starters try the following questions, courtesy of Amanda Clayman, a financial therapist and Financial Wellness Advocate for Prudential. “The most important question to ask yourself in assessing financial health is: ‘How can I use money as a resource to fuel the life I want?’ Similarly,’”How do I want to use money to take care of myself and others?’”
The two questions help you manage money in terms of needs and desires, not out of anxiety or obligation, Clayman explained. “[These questions] help us to remember that though the future is very important, we don’t want to sacrifice all of our happiness in the here and now with the idea that we’ll get around to enjoying life someday,” she said.
Brainstorming and deciding where you want to be financially in a few years allows you to not only put it out into the universe (always a good thing), but to also have a clear long-term financial goal. When you have a vision for where you want to be, it’s easier for you to backtrack to where you are now and determine the measurable steps to get there.
Finally, you’ll also want to communicate your money goals to your significant other. This is especially important if you share accounts, live together, or just want to be honest about what you can afford to do together.
Ask: Do you know where you currently stand—financially?
What if you got to know your situation, intuitively, and objectively?
When was the last time you did more than just glance at your total ‘available balance’? Has it been months since you dug into the details of why your checking balance is the way it is? Have you done an audit of your current subscriptions and automated bills to make sure nothing is awry? Is there a credit card that’s a better fit for your spending habits? What about your current credit score? Do you know what it is, and how it might be impacting your ability to get a loan?
There may be trouble areas you’re not even aware of until you sit down and carefully examine this finance stuff during your money date. Reviewing the current status of your accounts will help you better assess not just where you stand, but how you feel about your finances.
Ask: Are you currently enjoying your relationship with money?
Are you happy with things as they are? Or are you looking for something better down the line? If so, what does that relationship look like?
Getting into the nitty gritty details about your finances is important. But it’s also crucial to reflect on your emotional relationship with money. Does merely thinking about your bills and spending habits fill you with anxiety? Are you a frugal person by nature? If so, is it because you’ve always been that way or is it because you’re afraid you won’t have enough at the end of the month? When you spend money, what about it brings you joy? (If any?)
Ask: Does something need to change for you to be happy?
What needs to change in order for you to have a healthy relationship with money?
Once you’ve determined where you stand in your “relationship” and pinpointed problem areas, focus on possibly solutions. Ask yourself what changes would need to happen to bridge the gap between where you are now and where you want to be. This applies to both your short-term and long-term goals.
If you’re stumped on where you can make changes and smart money decisions, don’t worry. We’ve listed a few starting points below. Use them as a guide for your financial check-in and a checklist for areas you can improve on.
During your money date, review these four categories:
Clayman advises focusing on the “four quadrants” of your financial life. Examine, she said, “What do I Owe, Own, Earn, and Spend?” While some questions might be easily answered, others might take some digging and analyses. That’s okay! Just be sure to not overlook the howin your relationship. “It’s not just aboutwhatyou’re doing—your list of tasks—even more important ishowyou’re doing it,” Clayman said.
Oh, and don’t aim to cover the entire scope of your financial health during your first money date! You wouldn’t dive into everything during a first date, either, would you? Clayman advises to “start small, be consistent, and be gentle with yourself,” during your initial money dates. “The more we push ourselves into an emotional red zone, the more likely we are to abandon our efforts down the road,” she said. “Try to make it doable and even enjoyable, and remember to reward yourself afterward.”
Use this checklist to help plan your next money date:
—Check your credit score report
—Make a plan to tackle your credit card debt—Review the status of your student loan(s)—which are usually higher for women (!)
—Calculate your cost of living
—Review your benefits and plan for retirement
—Open a smart savings account like with an online bank
—Look for ways to start investing your funds and buying stocks
—Find ways to save on your regular bills and subscriptions
—Meal prep your way to extra savings
Look for ways to do a spending detox and a “no-spend” month
We all know it’s key for happy couples to have regular date nights with each other. Make it a point to schedule a regular money date with yourself. On these dates you’ll be able to continuously check in with what you want, and whether you’re on track. It’s work—sure. But don’t all the best relationships take work?