Black Hills Woman Magazine | Making a Money Inventory

Making a Money Inventory
by Kathleen Fox

If you need a wardrobe makeover, what’s the first thing you do? Go through the closet and take inventory: what fits, what’s out of date, what no longer suits your lifestyle, what you simply don’t like, what you love and would wear every day if you could. Then you decide what to keep, what to get rid of, and what to replace with something new.

In the same way, if you need a financial makeover, the place to start is with a complete inventory. What money habits show you at your best? What embarrassing mistakes are hidden in the back of your financial closet? What is serving you well, and what do you need to replace with new, more useful habits?

Before you begin, here is an important reminder. In order to be useful, this inventory must be as complete and honest as you can make it. It’s for your use only, so please, respect and trust yourself enough to look at the truth.

One component of a money inventory is simple, if not exactly easy: the numbers. List all your income, expenses, assets, and debts. No fudging, please: this is information, not judgment.

The second, harder component is what’s behind those numbers: your decisions and behavior around money. Explore your financial history, and you will begin to understand not only what your financial patterns are but why they developed and how you can start to change them.

Here are some questions to get you started. Each one is designed to help you find the money patterns you want to keep as well as the ones you want to change.

What was my family’s “culture” around money? (For example: carefree spending, fearful frugality, generosity, envy of wealth, working hard for money, contempt for money.)

What significant positive money decisions have I made? What money mistakes have I made? What did I learn from them?

What money setbacks have I experienced that were out of my control (serious illness, job layoff, natural disaster)? How did I cope and what did I learn?

What money choices and behaviors am I proud of? Which ones would I be ashamed or embarrassed to tell others about?

In what ways, large or small, do I act with integrity around money? Without integrity?

What in others’ money behavior do I admire? What do I despise? Where do I see any of those behaviors in myself?

These questions are just to get you started. There’s no one right way to do a money inventory; the only “must” is honesty.

Which, of course, is the hardest part. Most of us are embarrassed to admit our mistakes and have been taught not to brag about our successes. Acknowledging either, even to ourselves, can be a challenge.

So as you inventory your money patterns, please remember that we all have uneven money histories, just as we all have both style successes and fashion flops hidden in our closets. The first step toward updating either is to bring everything out and take a good look. BHW


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