How to Improve and Excel in Your Financial Spring Cleaning Monthly

Fed interest rate cut or not, April is always a great excuse to engage in Financial Spring Cleaning. Buckle up because it’s going to be a turbulent ride through Q4 2024. Prices are so high, it’s best to stay home for a bit if you can.

The Federal Reserve met as of May 1, 2024. Investors, Banks and consumers were looking to see if interest rates will be lowered, unfortunately we are still holding. Since July 2023, the federal funds target rate has been set at 5.25% to 5.5%. After raising rates 11 times since March 2022, consumer confidence is waning and resentment will spill over into the political season.

This is the new normal. I’m still betting on the rate cut in November at the earliest or in December. What does it all mean for you? As a spender, this is not good. For savers, higher than average interest rates translate to money will be printed monthly or quarterly. And for investors, if there are quality companies dropping sub 10%, the correction might be a great opportunity to bank on future returns.

The 1st Quarter of 2024 increased by 1.1%, But is it Enough?

The US economy grew by +1.6% in the first quarter; good right? Well, it is short of the estimated 2.4%. While it might not sound like much, economists are concerned that we are still paying way too much for common goods. And, consumers agree.

Translation for regular folks?

Last year, households shelled out an extra $8,000 for expenses. Add at least $2,000 this year for a total of $10,000 over Fiscal 2023.

Gas, Groceries, Travel, and Energy are all up. Juice and Drinks were up 27.5% in March. Rent was up 5.7%.

To make matter worse, most are reaching for credit cards and/or tapping into their life savings. That’s a powerful combination for long-term poverty.

How much so?

With new cars going for more than $50,000 and the average home selling for $480,000 at 7%; Americans will have to ditch out nearly $700,000 in interest over a lifetime. Fortunately, the same solutions during times of uncertainty, hold. It’s time for a deep financial spring cleaning routine. It will involve drafting your goals, managing where your money is going, and investing the difference.

It comes down to having a financial plan.

A Better Financial Plan Pre-, During, and Post Recession

My wife and I hit the $1 Million+ Net Worth in August 2023. We were also recently featured on Bankrate’s “How Black families can build generational wealth, according to experts.”

To think that as of April 2020, we were hovering north of $220,000. This is wild proof that sticking through works over time. No matter what’s going on there is always room for improvement and wealth building. IT WAS NOT EASY. However, the journey was made easier by not over-leveraging before the pandemic way back in 2016.

If you are new here, this article is the TNFG monthly Net Worth Breakdown for April 2024. You are in the right place to see if we can ‘make money, make sense’. Additionally, there are always usable financial nuggets that might help you along the way. Our goal is to show you what we did so that you can do it better.

The best way to survive the next recession is with a great financial plan.

Can We Do This Recession Already?!

I like how MarketWatch puts it, “Don’t worry about the recession coming, it’s likely already here.“

The probability of a recession is up in the air. It’s always been that way and will always be that way. Why?

Recessions are cyclical.

It’s like worrying about the night coming at the end of the day. It’s part of the fabric of how human beings interact with more. I think of it as a recalibration of wealth and an opportunity for the next generation to jump in. Instead of growing in fear, lean into learning. Accept challenges and become more resourceful.

My wife and I started digging into the pantry. We think this is a great time to become better cooks. Especially as restaurant prices skyrocket. We recently paid $150 for four drinks and two appetizers. DC prices are increasing on top of mandatory tipping of 20% or more.

John Leguizamo thinks we should tip $100 minimum. God bless his soul cause I’m not going out anymore. There is literally no incentive when there is food and drinks at home.

Our Net Worth Dropped By Nearly $12,500!

Lesson – Stocks will drop by 10, 20 or even 40%. Try not to lock in the losses.

The month was chaotic but April attempted to end positively. We were up as of March 28, and then the rug was pulled from us. Another war, more spending and more instability. All in all, we were skirting down $40,000 before the final week. In the end, we are still outperforming the market by 20% for the year. See screenshot #2

What’s the current strategy?

Aggressively pay down credit card debts to position ourselves to invest in $65,000 on the back end of the year. Additionally, we need to make room since we are slated to do some renovations starting August.

While stocks are cheaper, we are locking in purchases of Amazon $AMZN, Nvidia $NVDA, CVS $CVS, and $GOOGL. These are quality stocks to buy and hold for the long term for our portfolio. We also added $RDIV for our Health savings account. Since it pays out dividends, we should expect at least $1,250 annually.

Try to avoid the urge to spending and increase lifestyle expenditures. This is the time to build your savings and purchase stocks. This strategy is a hedge for the future. Does who can adapt, will win.

What Happens Next!

The post-pandemic universe is different. It will be a while before we feel a sense of ease. There is still a rise in mental health issues that we will all have to contend with. Additionally, there is a growing sense of entitlement for less effort. It’s best not to follow the crowd down the rabbit hole.

All things considered, our net worth is only down -0.98%. Still well positioned to hit our goals for the year. The road to success is non-linear. It’s better to stay positive even during a negative month.

Financial Spring Cleaning in Between High Expenses

We brought in good money ($17.4k) but we ended up overspending through out the money. Some entertainment, shopping for clothes and finally business travel expenses.

Can’t forget about the taxes though.

Inflation is a real thing. People are feeling it after all this time. I was warned about this in 2021. We spent almost $700 on food and restaurants. Our monthly amount in 2019 was on average $600/month. This seems so long ago.

On top of that, we had to fork over $2,500 for taxes this year. We’ve improved on our Amazon spending. Last I checked, we spent nearly $100,000 since 2012 on those deliveries. On average, each purchase was less than $35. This proves that it’s the death by a thousand cuts that get you.

Another expensive auto bill. Not going to lie, it might be my worst purchase.

We have two cars. One of them is a hold dependable 2009, while the other is a sexy 2023 car that all the robbers want. The monthly payments and insurance round out to $1,000 monthly payments! And that’s every month. April 2024 will go down as our most expensive month ever. Wildly, April is always the most expensive month for us.

Suffice to say, it’s been a very long month. Right now, my mind is juggling how we stage our cash flow to start helping out our parents in 2027. Money is getting tight so we need to band together to make the dollars stretch.

Money stress breaks down people, relationships, and our bodies. It’s best to look ahead and prevent further wear and tear. There are a lot of home upgrades still pending. That’s how opportunities and choices come at you. You have to be five steps ahead to capitalize on the future.

You have to mitigate the future with mental preparation. We have to get that number back to $7,500 in our bank savings account by the end of the year. Our Acid Emergency Financial Plan helped us get through tougher financial times.

Time to reset.

Pumping the Breaks on Spending to Prepare for Whatever Comes Next

With prices peaking, it’s best to step back and not overspend where we can. We had a great talk about our goals and re-centered how we would get there. Remember this key metric of wealth, “Stop equating happiness and social acceptance based on the money you spend.“

Beyond that here are our overarching goals through 2025:

1. Invest up to $100,000 for the year. Including $17,500 in our M1 Finance Brokerage. Check out our Starter Kit x10 portfolio in real time. If you like the platform and want to start investing, I have the $10 for $10 referral if you need it – https://m1.finance/SYdqDJ2SyADC.
2. Shooting for a sustained investment rate with the push for a $1 Million total investment portfolio by March 2025.
   • To help monitor your savings, cash flow, net worth, investments, retirement, and more. All FREE with Personal Capital! Sign up with my link & get a $20 Amazon gift card. *Terms apply. https://pcap.rocks/lawrencegonz
3. Travel to four destinations for the rest of the year. We love to take adventures overseas. Secretly, it’s about the food and the sites. But we do leverage our travel credit cards for rewards and perks.

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