After more than a year of living through a pandemic, we’ve learned that managing your money is more important than ever.
Most Americans have had to deal with significant changes in their lives because of COVID-19 — to their health, social lives and finances. Millions of people have lost their jobs — working mothers and people of color have especially suffered — and millions of others are living paycheck to paycheck. At the same time, many others have saved more money than ever during the pandemic because they kept their jobs and had fewer expenses.
Whether your goal is to find a job, start an emergency savings fund, save for college or make sure you have enough money to retire, MarketWatch is launching its first-ever money challenge to help you:
- Get a handle on your financial situation
- Learn why you act the way you do around money
- Set a goal
- Take action to achieve it
Even though we’re launching this challenge April 5, you can participate year-round. Your bank account and peace of mind will thank you!
Week 1: Get a handle on your financial situation
The first week of this challenge is all about the basics.
We’re starting slowly, but even these easy steps can help set you up for success.
Your first task: Log in to all of your financial accounts. Do you know exactly how much you have in the bank, and in any investment or retirement accounts?
You may have forgotten some of your passwords, or even that you’d opened an account at all. This is the perfect time to figure out your starting point, when you spend just a few minutes to organize your financial picture.
Everything you do to spend, save or invest your money in a way that will serve your financial goals is worth it.
Research has shown that the most likely time for people to check their financial accounts is when they are expecting good news. But coming to terms with our anxiety and checking our full financial picture, even when it may not be as rosy as we’d like, helps us to stay on track, and to avoid any fees we might incur for keeping our accounts at low or negative balances.
Develop a plan for checking your accounts more regularly going forward. Pick a time, and write it on your calendar. Can you check all of your accounts at least once a week? That’s a great place to start.
This is great preparation for your second task: Review your retirement accounts, if you have them.
Are you aware of any retirement services your employer offers, such as a company match for money that you contribute? More than 97 million Americans have access to an employee-sponsored retirement plan, so there’s a strong likelihood you are one of them.
Are you contributing enough now to get your company’s full match? If not, consider amping up your contribution, if you can fit that into your current budget.
If you’re not sure how much you should be contributing, plug your current contribution into a retirement calculator, like this one from MarketWatch. That should help you a lot.
Once you’ve done this, relax! Then find a time when you can do your third task:
Evaluate all of your subscriptions. Do you subscribe to multiple streaming services? How about membership clubs, like gyms? Did you once sign up for a professional service like a software, and completely forget about it?
Take a look at your most recent credit-card statement, which should only take a few minutes. Are there any recurring charges you don’t recognize?
Spend just a few minutes to decide if there are any you no longer use and want to ditch.
There are even some services that will negotiate your bills for you (for a price.) If you’d like to keep some of your subscriptions but wonder if you can lower the price, either give those companies a call yourself, or outsource it, to a company like BillShark, TrueBill or BillFixers.
You’re making great progress!
Week 2: Learn why we act the way we do around money
It’s time to blow up the shame we feel about money. Haven’t started saving for retirement and not sure where to start? Feel intense regret after you buy anything slightly expensive? We’ve been there and we want to help. Instead of worrying that you’re “bad with money,” let’s try to shift this mindset to “I’m learning more about money.”
That brings us to our first task of the week: Read one or two short articles that explain the relationship between our behavior and finances. If you’re anxious, it’s not just you: Millennials say anxiety about money is literally making them sick. But we’re going to tackle that in this challenge, and this story helps: Here are 5 things you can do right now to stop feeling so overwhelmed about money
Think about what makes a guilt-free purchase for you: Is it when you’ve budgeted for the expense? Is it when you’re buying something related to your hobbies that will bring you joy? Is it when you’re shopping for other people, and you like to provide for them? Noticing your patterns and feelings about money will help you understand your habits a bit more.
We pick up a lot of cues about money from our parents, friends and broader communities. Take a few minutes this week to think about what your relationship was with money growing up. We all have a money story, certified financial planner Christina Empedocles says. Maybe you grew up with financial hardship and now love to spend money but realize you need to rein it in. Maybe now you’re living far below your means and terrified to spend anything. Realizing your money story will help you make a plan, and financial therapists are great resources too.
Instead of worrying that you’re “bad with money,” shift your mindset to “I’m learning more about money.”
Once you get a gauge of where you’re coming from, let’s take some action. Try to initiate that money conversation that you’ve been avoiding. Have you wanted to open a joint savings account with your significant other? Get a parent’s opinion on a monthly budget? Want to research how to start saving for retirement? Get a date on the calendar and sit down for 30 minutes just looking at options. Don’t pressure yourself to commit to a decision yet, but picking a calm time to talk on the phone or in person with someone important will help open the conversation.
After you initiate that conversation, take a break! We’re almost halfway through our money challenge.
Sometimes it can be hard to know what we spend the most money on. End the week by trying to cut out non-essential spending for a few days. See what you miss when you pare it down to only essentials like groceries, utilities, bills, etc. That will be a good indicator to know what you value and what you can cut. Even delaying non-essential purchases like home decor or wardrobe updates can help you shore up your savings account!
Our goal with this money challenge is not to shame you into never buying a latte again or convincing you that avocado toast is holding you back from retirement. Instead, we want to think about how we use our money, how we feel about that and remove the shame.
Week 3: Set a goal
Congratulations on making it halfway through our money challenge! We’re focusing on goal-setting this week.
It’s time to have a heart-to-heart with yourself this week. Put aside a few minutes to think about your short- and long-term goals. We know that the pandemic has thrown many people off course and made it harder to think about the future. So don’t worry too much about planning every aspect of your financial life or setting hard deadlines. Instead, think about money as a tool that can help you achieve your goals, whether that’s owning a home, getting out of debt, supporting a family member or starting to save for retirement.
What are your goals? Do you want to change careers, go back to school or make more money? Do you want to save for your children’s education? Do you want to save to buy a home or even a second home? Or maybe you just want to feel financially secure and stop worrying about money every day.
When we asked MarketWatch readers about their money goals, we heard a wide range of answers: Some wanted to save enough to retire, others wanted to pay off debt and several wanted to invest more. Take some time to think about what your goal is.
Once you’ve visualized your goal, talk about it with an accountability buddy. Speak it into existence, manifest it, meditate on it, whatever you need to do to realize your goal is worth pursuing and you can get there! Research from The Ohio State University shows that you’re even more likely to achieve a goal when you share it with someone you hold in high regard. But that’s not the only way to succeed: Even writing it down can be a great first step, and bonus points if you display your written goal somewhere you can frequently see it, like on the fridge.
Lastly, read about setting goals and sticking to them. This story has some realistic money goals that are still relevant. When setting your financial goals, it’s important to give yourself a pat on the back — and give yourself a break if you’re feeling stressed that you haven’t accomplished something yet. Even idealizing where you want to be is an important step.
Week 4: Take actions to reach your goal
We’re down to the last week of our money challenge! Congratulations for making it this far. Your finances will be all the better for it.
For our final week, we’re focusing on taking action to reach your overarching financial goal. Of course, everyone’s goal is different. But we have a few suggestions that should work for nearly everyone.
If your goal involves spending less money or increasing your savings, look at your recurring expenses and see if you can reduce them in any way. Many bills can actually be negotiated. Especially during the pandemic, everything from utilities companies to WiFi providers to meal subscription services have become more flexible with pricing. It doesn’t hurt to call your cell phone provider, mention your customer loyalty and see if you can get a better deal on your recurring expenses.
Relatedly, look at your biggest expenses like your housing costs, mortgage, car and student loans and explore your relationship with those. Is it possible to refinance or negotiate in some way? Is it time to move and take advantage of lower rents in some cities? You likely won’t be able to lower these expenses in a day, but it’s always worth evaluating your biggest expenses to look for more affordable options.
Checking in on your personal finances is a form of self-care.
Lastly, let’s keep the good habits from this month rolling. Choose a software or a system for tracking your finances going forward. Checking in on your personal finances is a form of self-care! We’re not advocating that you track every penny, but instead find the right system for you. “Passion budgeting” is a system that encourages you to spend on what makes you happy and try to save in other categories you’re less passionate about. We’ve also rounded up a few apps that can make your life easier, like Mint to establish a budget and stay current on bills and Honey to take advantage of online coupons.
Remember that any little change to your spending habits or any bit you can invest is important. Compound interest can work wonders, and it only takes a little bit to get started.
And that’s it for our challenge! If we want you to take away anything from our first-ever money challenge, it’s this: Everything you do to spend, save or invest your money in a way that will serve your financial goals is worth it. It’s time to remove the shame we feel about money and instead take little steps toward our goals, whether that’s becoming financially secure, paying off debt, helping others or investing for retirement.