Money Mapping

Now that you've decided that you're done with feeling like you have a hole in your pocket, you're read to face your financial reality. The first time you do this is probably the most stressful and scariest because this is where you start learning where you have been putting your money this whole time.

Materials Needed

• Last full month's bank statement

• Journal

• Calculator

• Pencil

• Pen

• Credit-monitoring app**

  • Credit Karma

  • Nerd Wallet

  • Credit Sesame

    • Fun playlist

**Useful if one of your goals is to increase your credit score

Journal It!

Before you start calculating, use your journal to write your feelings about what you think your financial situation is at the moment, and why you are making this step towards financial peace/freedom. If you have goals in mind, like a car, vacation, home, etc., make sure you list those too with an estimated date and amount needed.

Map It Out

After you've gathered all of your materials, decide what platform you want to use as your Money Map. If you're more of a pen-and-paper type of person, feel free to use your Journal. If you're more of a tech-savvy person, you can use a Google sheet or Excel file. I also have my own fillable template with a built-in calculator you can purchase here.

Next, use your Money Map platform to calculate where your money will be going next month. Use your bank statement as a reference to ensure you have all your bills accounted for. Make sure you're viewing a complete month's statement.

If you are not using my template,

• start by creating a list of all your fixed bills (fixed meaning that the monthly minimum does not change) and their monthly minimums.

  • Example: Car Note, Rent/mortgage, cable, internet, any subscriptions, student loans, etc.

    • Next, add your fluctuating bills (fluctuating meaning that the minimums can vary every month) and their minimums you will have to pay for with this check (if you do not have this information yet, you can use last month's minimum as an estimate).

  • Example: Water/electrical bill, private student loan, credit cards, groceries, etc.

    • Now that you have your list of bills, calculate your total monthly responsibility and note it either next or underneath your list of bills. . Make sure every penny is accounted for.

    • Next, calculate your total monthly income and note it somewhere on the same page of your bills. Make sure you label it as your Monthly Income.

    • Now that you've calculated your monthly expenses and your monthly income, subtract your expenses from your income (Income - Expenses) to see if you're left over with any money.

  • If you have money left over, ask yourself if you are okay with this amount as your monthly allowance and how much are you willing to invest in yourself for emergencies. Put this amount in your list of bills and label it Savings. Whatever is leftover is your allowance, you can use this to go out with your friends, buy yourself a gift, or whatever else you want to do with it. Make sure to move this amount to a separate checking account or cash it out to ensure you don't spend more than what you've allowed yourself.

  • If you don't have money left over, or you don't like the amount that you are left over with, review your list of bills. Go through each bill and figure out what bills you need to keep, and which ones you can cancel/reduce. Example: When I first created my Money Map, I realized I was in the negative (more expenses than income). I went through my list and decided to cancel my Cable bill and just keep the internet. I already had Netflix and Hulu, so I just kept those two and was able to afford them, since my Cable bill was removed from my budget. In most cases, you realize you don't need your subscriptions, so canceling those ends up making more space in your Money Map.

  • If after editing your Money Map you still don't have enough money left over, calculate how much it is that you need per month, in order for you to be at peace with your Money Map. Once you have a dollar amount, brainstorm different side-hustles you can do to increase your income. Example: My first side-hustle was selling supplements, then I started driving Uber and Lyft, now I teach Zumba once a week.

If you are using my template, follow everything I mentioned above but just replace my labels and amounts with your own. The sheet includes formulas to calculate your totals, so all you need to manually add are your minimums and total income.

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Something to keep in mind when creating your Money Map is that it's just a map to hold you accountable. Your map can and will fluctuate with time because life happens and goals change. And that's okay! Your Money Map should give you hope and reassurance that you are making progress towards your goals and financial peace/freedom. No matter how old you are, it's never too late to start.

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With grace and flexibiliy,

Flor E. Carabez, M.Ed, Ed.S

Founder and CEO

Esperanza Equity Consulting, LLC

Equity and Comunidad