The Personal Finance Checklist

Photo by Jessica Lewis on

So, you are interested in managing your money, but you are not sure where to start. Where do you begin? When should you start thinking about personal finance?

Well, the answer is today. In attempt to make managing money a simple process, I wrote a checklist for the most important areas of personal finance that are essential to building wealth.

Why should I follow a checklist?

When you go to the grocery store, you have a list of every item you need and you check it off as you go. Well, this is very similar to a shopping list however, you can think of it as a financial shopping list. Check off each item that you have, and if it is not checked off, that means you may want to consider getting that item.

The earlier you follow this checklist, the better. Think of your future life, and how you want to live it. This checklist will ensure that you are prepared for that time of your life. Your current spending and saving habits will determine your future financial standing, remember that. Let’s begin!

1. Set up a budget

This is simply to track your total income, expenses, and savings. With a budget (financial planner), you will know exactly how much you can afford to save each month. By using a budget, I have been able to keep track of tuition and go to college without taking on loans. See the budget templates I have created here.

2. Set up your bank accounts

To effectively manage your finances, you will need at the minimum:

  • A debit card
  • A savings account

The debit card is used to transfer your funds to other accounts. It is ideal to have a bank account that does not charge annual fees.

Your savings account is where you can store your extra money or emergency funds. It is generally used for short-term savings because you can easily access these funds. The next step up from a basic savings account is a high yield savings account, which means they have a higher interest rate that they pay you.

Learn more about high yield savings accounts here.

3. Start saving for an emergency fund

Your emergency fund is money set aside to help cover the cost of emergencies. It is recommended to have 3 to 6 months’ worth of expenses saved in this fund.

The calculation is total expenses multiplied by 3 or 6 months. The emergency fund can be saved in your savings account or high yield savings account. The budget template I created includes a tab where you can see your saving goals and how much money you need left to fully fund them.

4. Open a retirement account

Besides having savings account for short-term savings, you will need a retirement account for your long-term savings. The retirement accounts you have available to you depend on where you live. I have a Roth IRA with Vanguard because my employer does not offer retirement benefits. See if your employer offers and retirement benefits, or seek out other options such as a Roth or traditional IRA.

If you do not have a retirement account open yet, make it a priority to do your research and open one. Here is an article about the benefits of opening up a retirement account.

Your retirement account will grow in value based on the contributions you make, and the returns on the assets you own in your retirement account (stocks, bonds, ETF’s).

5. Learn about investing & start investing

Your retirement account needs to be funded; but how does it grow over time besides putting cash into it? The answer is investments.

I learned much of what I know from reading Quit Like A Millionaire, by Kristy Shen and Bryce Leung. Reading books about investing is a great place to start, without needing to hire a financial advisor. If you are new to investing, here is an article that explains an introduction to investing.

In summary:

I hope you find this helpful and that it gives you some guidance for how and where to start with managing your money. If you need help setting up your budget, you may want to consider reading my article about how to set up a budget.

If you enjoyed reading this blog post, feel free to support this blog via my Buy Me a Coffee page!

Published by Dana Johnson

Hi, my name is Dana and I help teach the value of budgeting & saving early on in life so you can achieve your financial goals.

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