As we settle into the New Year, and the silly spending season comes to a very thankful end, it's time to start considering a cleanse. Not the juice kind, but the financial kind -- so you can breathe a sigh of relief, because drinking nothing but kale juice for a week sounds like abject misery, tbh. Financial cleansing means going over your finances, creating "clean" money goals, and obtaining them by going on a spending fast.
Maybe you're reading this thinking "But all my savings are in a high yield interest account, my credit card is paid off and I never buy coffee, always make it myself!" Well, we're all slow clapping for you, congratulations -- you probably don't need to do a financial cleanse. You do immediately need to reveal all your secrets to us, you wicked magician person who has somehow managed to figure out what a 401k is. But if you're not some kind of rubbish person whose financial habits are so perfect your whole life is a cleanse, you might want to consider if a financial fast is right for you. Here are some questions you should ask yourself to figure out if you should begin 2017 with a financial cleanse.
1. Do you often wonder where all your money went?
If you consistently find yourself looking at your bank account and wondering how your weekly pay dwindled to $4.16 in four days, you need to assess your spending. Chances are, you're making a lot of "wasteful" purchases, buying unnecessary lunches at work, impulse buys at the drugstore, and multiple coffees. If this is you, cleansing yourself of these needless spending habits will be essential to budgeting for the things you really need.
2. Are you in debt?
Do not pass go. Go directly to financial cleanse. If you're in any kind of debt, and if that debt is either stagnant or growing, a financial cleanse might be just what you need to get on top of it. Re-thinking your spending habits will ultimately help you conquer your debt, and the first step is cleansing yourself of toxic purchasing.
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3. Do you have a savings goal you're struggling to reach?
Have you been trying to save for that vacation for over six months now, with little or nothing to show for it? Is that essential winter coat still sitting in your online shopping cart because you just can't seem to get together the dollars to spend on it? Do you choke on your own laughter when anyone even says the words "house deposit"? If you've been unable to meet your savings goals it's time to ask yourself why, and to flush out the bad money ju-ju that's preventing you from making it rain on your savings account.
4. Do you have a personal budget?
If the answer is no, you need to go to your room and think about what you've done. A financial cleanse is just as much about creating realistic and healthy future plans as it is about immediate gratification. Much like a diet, your financial cleanse shouldn't be a momentary trend. If you don't have a purposeful, ongoing personal budget, a financial cleanse might be what you need for you to institute one in your life.
5. Do you have an emergency fund?
Markets and employment are unreliable. The world is a flat out mess right now. The freelance and gig economies are growing. Machines are taking over. Basically, what I'm saying is: your salary is not a sure thing. Alternately, you could suddenly find yourself with an unforeseen expense, like needing a new phone when your current one dies, or, touch wood, with doctor bills, fines, or tax payments adding up. Literally anything can happen at any time, and you need to be prepared. That means having a little bit set aside to get you through a rough money patch. A financial cleanse -- say, maybe instead of buying three coffees a day you put that money aside for a rainy day -- might be just what you need to kickstart your emergency fund.
6. What’s your retirement plan?
Let me guess, you don't have one. Retirement might seem like eons away to you -- we'll here's a wakeup call -- it might really be if you haven't started planning for it. Even if you're in your twenties, retirement planning is essential. During the financial cleanse you most certainly need to take, start planning what and how you're going to squirrel away for your winter years.