Financial Planning: I’m a Geek and I can Prove it
October 07, 2011It was pointed out to me recently that I can be quite a geek (fortunately, my girlfriend likes geeks). It was also pointed out that when I was a kid I had to feed my pet dinosaur before I walked 10 miles, uphill, in both directions, to school in the morning. (I love my kids! Anyone want them?) I guess a little back-story might help. In an interesting twist (at least to us) of timing, my girlfriend and I share a birthday for a brief moment. Her birthday is on the 20th, mine is the 21st, and we like to spend our birthdays together doing fun stuff. Or, at least mostly fun stuff.
On our most recent birthday, we went to Toronto for the weekend. It was a great time, but I did give her the opportunity to make fun of me a little bit. And, it’s because I have an “inner nerd” that likes to come out at times. One of my birthday traditions is doing a little “Financial Checkup.” I review my longer term goals, update the balances of all of my accounts, update the value of all of my assets and liabilities, and put it all into a Financial Organizer. I like to see if I’m getting richer or getting poorer. It’s gone in both directions over the last few years, especially with the stock market (and corresponding 401k balance) declines in 2008 and the decline in real estate values. But, continuing to plug away at saving on a regular basis has allowed me to make slow steady progress. To take it a step further, I save my twice/year net worth (Assets – Liabilities) sheets and have a summary sheet that shows me a graph of the last 15-20 years of net worth. (Told you I was a geek!)
In the beginning, I had virtually no assets and student loan debt, so my career began with me having a net worth below zero. Looking back at that reminds me that I started with nothing, and when times get tough (and they certainly DO), I look back at where I started and remind myself that hard work and good financial habits are what have allowed me to get my net worth to something above zero now. I know it’s a little bit of work, but it takes me all of maybe 20 minutes to do it. Having www.mint.com linked to all of my accounts gives me a very quick way to grab the data and has simplified the process for me. I highly recommend Mint and tracking your net worth on a regular basis. I would, however, caution you that if you do it from a hotel room while your significant other is off to grab coffee for both of you, you will be, rightfully so, subject to a bit of tongue in cheek ridicule for not being the most exciting person on the planet.
Another “Birthday Tradition” is checking my credit report. Yeah, I sound like the kind of guy you want at your next party, don’t I? I used to check all 3 credit bureaus (Experian, Equifax, and TransUnion) on my birthday, but have since tweaked that tradition a bit. I still order 1 report on my birthday, and that’s what I was doing when Julie got back with our coffee and what prompted her laughter at my birthday traditions. I use www.annualcreditreport.com to order my FREE credit reports; it’s easy to use and it helps me track which report I’ve ordered and when. Rather than ordering all 3 on my birthday (when your name is Michael Smith, a lot of things can end up on your credit report that don’t belong to you!), I now order 1 on my birthday, 1 4 months after my birthday, and the last one, 4 months after that. Why? Things can pop up at any point, and with the ability to order 1 free report from 3 credit bureaus, I’m never more than 4 months away from finding 2 or 3 things on my credit report from a Michael Smith who isn’t me.
Even if your name is a bit less common than mine, it’s a great practice to start reviewing your credit report fairly frequently. If nothing else, you can spot identity theft in the very early stages before it grows into a significant problem. That’s how I found that someone in Texas (where I’ve never lived) was using my name and Social Security number to rent an apartment, get cell phone service, have satellite TV, and order A LOT of food from a local Houston deli. Fortunately, I found all of that in a credit report review and was able to have it all shut down and removed from my credit report. What could have been a huge issue was only a minor annoyance. If you can set up an appointment in your calendar to order your credit report (either once a year or every 4 months, they’re both WAY better than never doing it), you can establish another financially sound habit.
Those are a couple of my birthday traditions, and maybe they do mean that I’m a bit of a nerd. But, they help keep me focused on my goals. If you’d like to move yourself closer to your goals, maybe you can adopt these practices too. Just don’t do it on your birthday unless you have thick enough skin and a good enough sense of humor to take the kidding that comes along with it. And, if you do make it an annual birthday tradition, let me know so I can tell Julie that I’m not the only person in the world who does this!!!