Take Financial Inventory

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Take inventory of your finances before the first of the year to get a clearer picture of where you want to go in the new year.

This week is a great time to see where you stand financially. If you’re not accustomed to a regular financial inventory, then this would be a great thing to add to your list of goals for 2012.

A financial inventory is when you survey your expenses, assets, and liabilities — and come face to face with reality.

It can be sobering, to be sure. In fact, the last time I mentioned this, a reader later wrote to tell me about the very difficult conversation she and her husband had about debt. It was a very tough conversation to have, but I think, in the end, a really good one.

We might not always like to face reality, but it’s always better to do so than to live in denial, or later, regret.

When we were getting out of debt, we made this kind of list every month. Usually there were no assets, just liabilities. But, we saw those liabilities shrink over the months. That was a huge encouragement!

Take inventory!

So, before the ball drops I suggest getting out a sheet of paper and consulting all your accounts. This doesn’t need to be complicated. Simply make a list of assets (cash on hand or in a bank account), a list of liabilities (debts), and a list of where your money has been going over the last few weeks or months.

You may love what you see. Or you may not.

But, at least you’ll know where you’re at as the new year begins. And knowing where you are is the first step to going someplace else.

If you have a realistic picture of your finances, you will:

  • be able to create realistic goals for the new year
  • be able to spend or save money in the right places
  • be able to curb your spending more because you’re not just shooting in the dark.

Taking inventory can, indeed, be hard. But, it’s good to know where you are in your finances.

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    1. My husband loves spreadsheets. That would make him happy, I’m sure. I just make a list. 🙂

  1. We keep a monthly ledger of our spending, recording every purchase in various areas, including utilities and insurance. Under MISC., I try and write down exactly what was purchased each time. Really makes you stop and look where the money is going!!!

    1. Quicken has been really helpful to me in tracking the expenses. But, I’ve got our trusty red notebook from our debt days where we write out our budget. It’s a wonderful souvenir.

  2. We rarely fought about money until we took the Dave Ramsey Financial Peace University class.

    I swear it was the best marriage counseling ever! Even though we had quite a few arguments during the course, now we are much closer than we used to be.

    I love the picture you used! I was going to do that for my kiddos this year and forgot. Thanks for the reminder LOL ~I can always do it for a birthday!

    1. Amen. Getting out of debt was one of the best things we could have done for our marriage.

  3. In the vein of saving, I thought it was you that had the list of foods to buy after Christmas, eg. butter etc. I am off to the store and cannot find it now. can you help Jessica?

  4. I’ve been working on our budget for next year since I’m the numbers person in the family. Unfortunately, I can’t finalize all the numbers until I see how the taxes and the new Health Savings Account we have through my husband’s work affect his net pay. Fortunately, not much has changed with the rest of the budget though I still set the goal of being 5% under budget.

    My biggest struggle has been keeping my dh in the loop about our finances. I’ve tried doing a weekly and monthly meeting. One of my goals for 2012 is find a way to involve my dh in our finances since we’re looking at paying off his car loan, a home equity loan, and preparing to send our 1st son to college in 3.5 years.

    1. Keeping communication regular is hard! Since we’re out of debt, we’re more likely to let the monthly meeting slide. Keep up the good work!

    2. Discuss with him about taking over/managing the finances for a month. Sit down, explain everything and then assure him that you’re available to “help” if requested.

      Did this with my DH just before birth of DD#1 (along with a month of having the manage the house by himself, support available by request) and HE said it was a very helpful eye opener… definitely got him more involved on a regular basis.

  5. Thanks for all the tips each week! We have really had to crunch this year since my husband lost his job in the spring. Thankfully I was able to take a position at our church as secretary and that has helped some. We both now work part time and share being home with our young son. We have always been careful with our money. But having to scrimp for each dollar really makes one get organized better in a hurry. Each week God blesses us with small triumphs though. This week’s triumph was doing grocery shopping for an entire week on $40. Challenge accepted and conquered!! Exclamation points in my budget column! (:

  6. It is really important to know. Confronting it can be hard sometimes, but it’s the first step into fixing things. Ignore it, and the situation will just compound itself.

  7. I’m going to check out some of these link=ups. Other than my studen loan, I am completely debt free. I’m working hard to be 100% debt free. It’s hard and requires a lot of sacrifice…but I’ll you something really neat: You can’t put a price on peace of mind. That’s priceless 🙂 🙂 Happy New Year to you and your family. Love and hugs from the ocean shores of California, Heather 🙂

  8. Great time to do this! I just looked at our actual expenses for the year and estimated our budget for 2012 using Mint (which is free). Now that I’ve been using it for a full year and “massaged” the categories to sync with my prior budget and categories, it was a cinch to set up our new budget. I hope to be more diligent about adhering to our financial goals (i.e. not overspending).