In my previous entry, I wrote about money and why one shouldn’t be owned by it. Money – and related themes – can be sore topics to most of us, and for many reasons. Mostly, it’s because many people aren’t good with handling it.
Now I don’t claim to be such a money whiz. However, I am on a journey of slowly building up my assets to where I eventually want to be. From saving, budgeting, to exploring investment options, it’s never too late to make money work for you, instead of the other way around. But it can’t happen if you don’t invest on the knowledge first.
And this can all happen if you take time out for a ‘Money Day’.
What in the world is a ‘Money Day’?
I have been doing my fair share of ‘money day’ before I even knew the term (mostly, it was ‘money nights’ because I’d do this before going to bed or after dinner). But I first heard about it from Chelsea on The Financial Diet.
Although I’m not technically subscribed (sorry, Chelsea!), I like treating their YouTube videos like my personal podcast. Usually after waking up in the morning, I’d pop in my Bluetooth headset, tune in to their channel, and brush my teeth my while listening to some financial advice. Not all their tips were applicable to me (I’m not U.S.-based), but they were light-hearted and practical nonetheless.
One of the things they mentioned was having a ‘Money Day’. In essence, it’s taking a day (or any time at all) to sit down and sort your money woes (or goals, it depends). It may sound logical, but you’ll be surprised how many people rarely take time to even update their passbook in my country.
Think you’re good enough with money to NOT take a Money Day? Answer these questions for yourself:
- Do you know your net worth?
- How much is your total debt?
- How are you funding your various goals (e.g. travel goals, school goals, etc.)?
- Are you still getting money from Mom and Dad?
- Do you know how to fill out tax forms?
- Do you have a financial portfolio?
- Do you have money going to your retirement fund?
- Are all your financial documents (e.g. checks, bank books, etc.) in place?
Having trouble answering them? Then why not take a Money Day to sort these out! Here are some things to help you get started:
5 Activities To Do During Your Money Day
1. Find Out Your Net Worth
Basically, your net worth is the difference between what you owe and what you own.
Knowing this can be a great starting point into truly looking at where you stand in your financial health. Similar to a doctor’s check-up, understanding your net worth can clue you in on things you may not previously have been aware of (i.e. extravagant spending habits).
You can use Bankrate’s online net worth calculator to begin. Here’s my sample net worth:
If you have accumulated debts, like student loans or auto loans, it’s important to start thinking about how you’re going to pay them back. Keep in mind that keeping way too many debts will lower your net worth and might give you trouble in providing for yourself and your loved ones financially.
Be honest with yourself as you calculate your net worth. But don’t assume that a dismal figure predicts your future! It only reflects current circumstances and should serve as a wake-up call or reminder – NOT something that spins you into depression.
If you end up with a negative net worth, think about what could be affecting it (e.g. debts, poor spending habits, etc.). Then think of ways to counteract that.
2. List Your Financial Goals
Do you have a ‘dream house’? Or maybe you’re aiming for a trip around the world? How about funding your own charity? No matter how small or big those goals are, you need to put them down on paper!
Neuroscience explains why this is magic: writing down goals helps your brain encode that detail into your long-term memory. This means you’ll always have it in mind. And when that happens, everything you do and every decision you make will subconsciously be powered by those goals.
Be highly specific. You can even create a separate journal that includes photos, magazine clippings, and news stories about people you admire to help power up your vision of the future. Not only is this fun, it’s a great way to remind yourself of what you want years from today.
3. Keep Track of Your Savings/Existing Money
Do you have multiple accounts or credit cards? Take a Money Day to make sure you’re on track:
- Know the exact amount on your passbooks.
- Download bank apps to always remain updated.
- Call up credit card companies to ask about perks or promos they have for you.
- Consolidate remaining credit card balances into one account with less or zero percent interest.
- Take a look at where your money is (i.e. insurance, bonds, checks, etc.).
- Know how much cash is currently at your disposal.
- See if you can automate your savings so you don’t spend it immediately after your payday!
Need to stop withdrawing half your savings when there’s a sale? How about a separate bank account! Create an account for travel goals, one for savings, one for emergencies, and one for actual spending.
If you’re an organized person who loves lists and taking charge, this trick can be a lifesaver. Personally, I have about 3-4 accounts, each for a dedicated purpose. These accounts are also in different banks. I love it because:
- No need to suffer with a bank that offers low interest rates, or has bad customer service. With different banks, I can pick favorites.
- My savings is separated from my emergency fund, travel fund, etc.. This way, I have no guilt when I need to shop – as I have a separate account for splurging alone!
- It’s quick and easy to keep track of how much money I’m saving. Lumping all your money into one account can often leave you feeling sad everytime you see it decrease in value.
**Please note that if you have trouble being organized or you’re forgetful, having ONE account is okay. However, you shouldn’t be deterred from looking at better banks.
If you’re from the Philippines, SECURITY BANK offers all kinds of accounts depending on your financial goals. I personally recommend their all-access account because of good interest rates AND accompanying insurance with FWD. Use my affiliate link so we both win big! Don’t forget to tell me about your experience after signing up with them.
4. Look Up Additional Sources of Income
Blogging isn’t the only source of passive income. It can also be too time-consuming, especially for busy folks or full-time parents. But don’t worry, there are all kinds of opportunities out there – just take time to explore your best options during your Money Day.
Use the Web, network to people in your industry, or sign-up for seminars. No matter what you choose, taking the time to discover opportunities will pay off in the end. So be patient!
5. Organize Your Portfolio
For people who already have a head start, take time off to really organize your financial documents. You don’t want to struggle finding your passbook in an emergency, right?
Get a good briefcase or document holder. Then arrange all financial papers, such as passbooks, insurance policies, investment reports, checks, ledgers, etc. in folders for easy identification. Place everything somewhere secure, yet quickly accessible. Don’t forget to tell a trusted loved one where it is, as a back-up plan in case of emergencies.
REMEMBER: You don’t need to take a complete day off. Many activities can be finished within a few hours (like filing your assets). However, you need to properly assess and chart the best course of action in order to see quantifiable results. In the end, do what works for YOU!
A Money Day doesn’t need to be done every week, or every month even. But it’s a necessary evil so you can be in touch with your financial reality. Knowing where you stand is vital if you want a smart way to move forward. But as with everything else in life, take it one day at a time.