Why it’s Important to do a Financial Spring Cleaning Monthly
Recession or not, April is always a great excuse to engage in Financial spring cleaning. Buckle up because it’s going to be a bumpy and violent economic ride through 2023. High costs of goods persist but at least inflation is slowing dowing to 5%. However, it is still unlikely that the Feds will either pause interest rate hikes or reverse them. The banking system as well as consumer confidence is waning.
This is the new normal, unfortunately.
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The 1st Quarter of 2023 increased by 1.1%, But is it Enough?
The US economy grew by +1.1% in the first quarter; good right? Well, it is short of the estimated 2%. 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 $6,000 to $10,000 for expenses. Gas, Groceries, Travel, and Energy are all up.
The worst part, 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 $400,000; Americans will have to ditch out nearly $700,000 in interest over a lifetime. Fortunately, the same solutions during times of uncertainty, hold true. 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 $700,000+ Net Worth in April 2022, and $800,000+ in January 2023.
To think that as of April 2020, we were hovering north of $220,000. This is wild proof that sticking through works over time. The Global pandemic was traumatic for many and yet there was room to build wealth. To be frank, 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 2023. 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 Just 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 very high. 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 really 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 edge more than $130 for four drinks, an appetizer, and an entree. 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.
Net Worth Drops? By Nearly $15,000!
Was it our Investments Again?
Wow, this time it wasn’t. The month was chaotic but April ended on a positive note for the market. We were up nearly $10,000. Add in about $45,000 for our new asset, and that’s +$55,000. The downside came from our credit cards and new debt which brought us down nearly $70,000.
Everything else is stocking up at least we are outperforming the S&P500 while making up ground for 2022. See screenshot #2
What’s the current strategy?
Since we still owe $8,500, we are going aggressive with credit card payoff while investing with a priority in the ROTH IRAs. While things are cheaper, time to lock in $AMZN, $NVO, $CVS, and $GOGGL stocks. These are quality stocks to buy and hold for the long term in my opinion. Besides that, we will pick up more High-dividend ETF stocks like $JEPI and $FDVV.
People are brewing to send us back to a booming economy. And, we are here to support their urge to spend.
What Happens Next!
The world is still changing post-pandemic. 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.
All in all -1.55% is 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. I was nominated among The 12 Finalists for Best Financial Influencer MAIA 2023, so check out the link: https://maiawards.org/insights/the-12-finalists-for-best-financial-influencer-maia-2023/.
Financial Spring Cleaning in Between High Expenses
Food costs went through the roof but those taxes though
Inflation is a real thing. People are finally feeling it after all this time. I was warned about this in 2021.
We used to spend almost $1,035 on food/groceries. That amount used to be an average of less than $600 per month. This seems so long ago.
On top of that, we had to fork over $6,500 for taxes this year. About $5,500 for us and $1,000 for my mom who took out a distribution due to retirement.
We do need to look out for Amazon $AMZN, they are taking a bite out of our wealth each month. The damage is micro expenses here and there to the tune of $560 (rounded up).
One major car issue cost us $1,000 to fix
Which also cause us to get a new car. So now we have two cars and $1,000 monthly payments starting May 12, 2023. We also front-loaded our travel expenses. Now toss in $4,000 of medical and dental expenses for good measure, and voila!
April 2023 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 2023. Money is getting really tight so we need to band together to make it dollars and efforts stretch.
Money stress breaks down people, relationships, and our bodies. We rather 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.
Got 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 will 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 for 2023 going into 2024:
- Investing up to $90,000 for the year. Including $15,000 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.
- Shooting for a sustained investment rate with the push for a $1 Million net worth in 2024. 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
- Travel to 3-5 countries in 2023 and 2024. 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.
- After earning $3,000 in April 2022 for 5-hrs of financial workshop consultations (clients included NASA, FIU, Nordstrom, and NABA), It’s time to focus on the plan to become a Certified Financial Planner (CFP). For just $5,000, I can take the course in 2-3 months and resurface with the CFP accreditation. A bit of effort for more money in the long run. The long-term plan is to kick this off in 2024.
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