There's still time to reach your 2026 money goals

0:00This message comes from NPR sponsor Charles Schwab. Financial decisions can be tricky. Your biases can lead you astray. Financial Decoder, an original podcast from Charles Schwab, can help. Download the latest episode and subscribe at schwab.com slash financial decoder. I was thinking of the fourth quarter of the year, just sort of like fourth quarter of a company's business year or the fourth quarter of a football game or, you know, they have quarters, right? Football? Very good question. Yes, they do. Thank you for asking that. Hey, it's Marielle Segarra. You're listening to Life Kit from NPR.

0:38And that was Jill Schlesinger. She's a CBS News business analyst, host of Jill on Money and the show Money Moves on YouTube. What I was trying to tell Jill is that I got the idea for this episode while thinking back about the days I reported on corporate finance. I was always looking at companies' quarterly reports. And they are technical, but they give a window into how a company is doing. What went right over the few months before? What went wrong? What challenges they're facing? Given that we're entering the fourth quarter of 2026, I wondered what would it mean to do a quarterly review for our own finances?

1:14Well, I mean, it's basically looking at the same thing you would be looking at as an individual. What's coming in? What's going out? And remember, these quarterly reports, it's a little bit dated, right? They're talking about the quarter that just ended. So the three previous months. I think the more interesting part of quarterly reporting is not about what has happened. It is usually in the conference call that occurs after the financials are released and the CEO or the CFO talk about what they think is going to happen. And this is probably where you get some of the surprises. They could be like, we thought our sales were going to be one thing.

1:58They're a little bit less or they're a little bit more and the stock price might react. But generally speaking, I think the biggest reactions come from when the CEO gets up there and she's like, you know that we thought we were going to make all this money for this whole year. We completely screwed up. There's no way we're going to make that much money. Those are the things that become really interesting when it comes to corporate reporting. But what could you take away as an individual is this practice of going through your numbers. On this episode of Life Kit, I talked to Jill about how we can do our own quarterly reviews this October and set ourselves up for the fourth quarter and the new year.

2:38I think what's kind of cool is if you're looking at the fourth quarter, this is a time where you could do something different before the end of the year that might impact you. So what usually will happen is in the fourth quarter, a lot of decisions get made because you have open enrollment, for example, for benefits at work. Maybe this is the time where you're going to say, maybe I should go on a high deductible plan. And maybe that means that I have to take some extra money aside that I thought I was going to spend on vacation, but use that for any expenses that come up because I have a higher deductible and I have to pay it out of pocket.

3:16Think about it this way. You have 90 days to take advantage of the calendar, and there's going to be a lot of competing forces. And of course, it would be silly of me not to note that once Thanksgiving rolls around, you're kind of screwed because all of a sudden you get sucked into the entire holiday season, and it's a lot harder to get yourself focused. I wonder if you were doing like a personal financial check-in at this moment ahead of the fourth quarter of the year, what numbers might you highlight if you first wanted to get a sense of where you're at? Like I think about companies, they highlight their revenue, their expenses, cash flow, debt.

3:58But let's look at like the cash flow issue, because now you have nine months of data, right? So here you're going to have by the end of September, right? You'll have nine months of looking at the money that has come in and the money that's gone out. You know, I always like to kind of look at the ongoing month to month expenses and then the little unique things like, oh, I had to go to a wedding and it was a destination wedding and I spent way more than I would have spent if I'd gone to a wedding down the street, right? You account for that and you look at it and you see where do I stand? And then you're also gonna want to look at your balance sheet.

4:40What do you own and what do you owe? If you have debt, maybe you've got student loans, maybe you got a car loan, maybe you have a credit card debt, maybe you have a mortgage. That is where you just wanna make sure you check in and you understand is anything different? Have I chipped away at this? It's also kind of a nice way to make yourself feel like there's progress. You know, I had$28 ,000 in student loans three years ago. Hey, this is awesome. I'm at 22. Hopefully that's the right direction, right? Or maybe you're going to just take a look-see and say, hey, what's my cash look like? What's my cash on hand?

5:20What's in my emergency reserve fund? Maybe I got some gift out of the blue. Now all the money's piling up. What am I going to do with that excess? Should I put it in an investment account? Do I need to fund my Roth IRA right now, before the end of the year? Then I'll do it again right after the first of the year. Takeaway one, start by looking at your cash flow. Money coming in minus money going out over the past three months and since the beginning of the year. What trends do you notice? Also, do your version of a balance sheet. What do you own, including how much money you have in savings and investments?

5:57And what do you owe? Another number that companies report is net income or loss. They also call this the bottom line. This is how much money they collected in sales minus all their costs. As an individual, this could be how much money you take home each month after taxes and deductions. Or you could do a version of net income that also subtracts your expenses like rent. The point is to see how much you have left over every month. that'll help you make choices about spending and saving and figure out if you need to do something to boost your income. We'll have more tips for your quarterly financial check-in after the break.

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7:51Should that really be the one update you skipped? Consider this the patch. Rinse picks up your laundry and dry cleaning, cleans it expertly, and delivers it back. Sign up today at rinse.com. Rinse. It's time to be great. Let's talk a bit more about cash flow. Why is it important that we know how much money is coming in and going out over time? I think what can be a little confounding is the greatest thing that has occurred in the last 20 years is that so much of our lives are automated. But it sort of puts you at a distance with a lot of these financial planning concepts. And, you know, I make a joke about this because I used to say that my mother would, like, manage the checkbook, right?

8:36She knew to the penny what was going on in the household. Forget about it. Like if my father happened to write a check and he didn't tell her about it, that there was hell to pay. Okay. But you're in touch with that because you had to go to the account or go to a bank. So now think about this. Your pay is usually direct deposited and so many bills have automated deductions and that can be wonderful, but it does keep you like a tiny bit behind the flow and the cash flow of what's coming in and what's going out is the way that you can kind of determine you hopefully have more coming in than what is going out.

9:18And then the decision point is, if that's the case, what am I doing with that extra? Yeah, it's interesting because let's say it's October and I'm looking back and I look at the different months of the year at what my expenses were, I add those all up and I also look at how much money I earned. That can also tell me when I was in a tight spot or when I had to pull from my savings. I feel like that's another good question to ask yourself. In terms of cash flow, you want to see what were the tightest spots in the year and can I plan ahead for those next year or were there purchases I needed to make?

9:57Think about this. Oftentimes people will say, well, you know, I'm self-employed, so tax time is stressful for me. I wrote a check for this much to pay my taxes over in April. Okay, fine. That's great. Maybe for the following year, you'll have to keep some extra money set aside. Or maybe you should change your withholding or your tax estimates. So like fourth quarter and then after tax time to make certain adjustments can be really helpful. Maybe it's something that's out of the blue. And I have to tell you that most of those negative surprises, whether it's, you know, I got into a car accident, insurance covered this much, but not everything.

10:37Or gosh, I had to take time off from work because my kid got sick. I burned up all my vacation time and then some. And so I think that for the planning purposes, the best thing you could do is, yeah, it's great if there's some seasonal pattern, but sometimes it's just saying, gosh, there is always something unexpected that comes up. I guess I should keep a little bit of extra money in my emergency reserve fund. And I would say that this is often something that new homeowners learn the hard way. Because you're a new homeowner. You're so psyched. I can afford my principal and my interest and my homeowner's insurance and my property taxes.

11:18And then you have like that moment where someone walks into your house and they're like, oh, you need a new boiler. And you're like, wait, what? Who's going to pay for that? What? Is that covered? Will you pay for that? Do you have some sort of plan for me? And a realtor gave me this really good advice a long time ago because I had her on my show. And we were talking about, you know, people who love buying old fixer uppers, people who like buying brand new. And she's like, you know what? There's always something that goes wrong. And she goes, I like to tell potential buyers that no matter what, look at the purchase price of your house.

11:57And just imagine that every year it will be 1 % to 3 % of that purchase price. So you buy a half a million dollar house,$5 ,000 a year, you're going to have to spend on something. You don't know what it's going to be. Just know that. And if it's a really old house, it may be$10 ,000 or$15 ,000. grand. So I think that one of the cool things about doing this check-in with yourself is that it prompts you to look back and also look forward. Takeaway two, when you're looking at your cash flow for 2026, take note of the tight spots when you had to pull money from your savings to pay for something or when you couldn't pay your credit card bill for the month.

12:40What happened? Was it an expense you could plan for in the future? Did you make a purchase that you didn't Really need to? What changes might you make now, if any? Another number you could play around with is profit margin. For a company, this is the percentage of revenue they have left after expenses. And they track how their profit margins change from one year to the next. Higher profit margins are generally considered better. Calculating your profit margin could help you visualize how much of your income you're spending during different periods of time and how your spending has changed over time relative to your income.

13:16So here's how to do it. Take your monthly income after taxes and deductions. Let's say that's$4 ,000. Then add up your spending. Debt payments, rents, utilities, gas, train fare, groceries, eating out, buying toilet paper and shampoo and clothes. Let's say that's$2 ,000. Then calculate. $2 ,000 is what percentage of$4 ,000? It's half, or 50%. So you have a 50 % profit margin for the month. Do the same calculation for other months or at different points of the year and see when your profit margin tends to fall. Once you've crunched the numbers, you can use them to set money goals. And here are three that Jill recommends.

13:59I mean, these are very boring financial planning concepts, but they really do work. Six to 12 months of your living expenses in a safe, accessible account, like a high-yield savings account. You want to try to maximize your retirement account to the best of your ability, hopefully up to the match and then some. And you want to pay down outstanding debt. Those three things are kind of your big three. And checking in right now and seeing where you stand with all three of those is a great idea. As much as you can make some of your goals concrete, that makes you more likely to achieve them. I really hate amorphous goals.

14:39You have to be concrete, right? So a concrete goal is I have, you know, 40 grand of student loan debt. I would like to pay that down in six years. And then you're going to work backwards and you're going to look at your cash flow and say, well, right now the federal government has me paying it down in 10 years. Do I have enough money to pay it down in six years? Maybe you do. Maybe you do. I would like to establish an emergency reserve fund with six to 12 months of my living expenses. of the available cash flow, some has to go to student loans, some has to go to establishing that six to 12 month emergency reserve fund.

15:18And I mean, I'm going to make it even harder for you, which is I'm layering on top of that, that if you work at a place that has a retirement plan, and there is a match, I'm asking you to do three things at once, right? Emergency reserve fund, pay down the debt, and also put in up to your match at the very least. And if you can do more, great. And every time you get a raise, maybe you can actually accelerate those game plans. Maybe it's the end of the year and you're working at a place and they give you more than a cost of living adjustment. Maybe you got a bonus. Now this is a great opportunity for you to say, how do we put those goals into another phase?

15:59Did I have a kid? Am I putting on yet another goal? gosh, I'd like to pay for education. Gosh, I'd like to do this. But all of these things, I think it can be overwhelming. And so what happens is you do flame out after a few months. So that's why if you can make it time bound and you can make it concrete, I think you have a much better likelihood of achieving the goal. Would you recommend that people think about 2027, like look forward to 2027 and just kind of like give up on the rest of this year? No, no giving up. You have 90 days. You can make a difference. I think when you give up, you've probably taken on more than you can, you know, just like emotionally more than anything else, which is like human beings.

16:45You want to have fun. So I think if you have blown through all of your quote unquote resolutions or goals of 26, pick one and try to do it for 90 days. And it might be, oh, you know what? I have 90 days. I'm going to just bump up my retirement contribution from 5 % to 6%. That's all I'm going to do for the next 90 days. And then during that 90 day period, monitor my cash flow and see if I can do something else and add to that in 27. Takeaway three, think of the last quarter of the year as an opportunity. Pick one of your financial goals and stick with it for three months. Then come January, you'll already be on a roll.

17:25You know, you mentioned earlier that the most interesting part of an earnings report is the earnings call, where executives are a lot more honest than you'd expect them to be, definitely a lot more honest than they would be in an interview, right? They're saying things to explain it to investors. But I think like a lot of quarterly earnings reports, it's about storytelling. And I wonder how much of that we can bring into our lives. What role does sort of like figuring out the narrative of your financial life play? I do think it's nice to celebrate a success. I really do. And it strikes me that a lot of people can be very focused on the future and they kind of don't give themselves a pat on the back for where they are.

18:10It's very easy to compare yourself to someone else. When I was a financial planner, I felt like it was so interesting to hear people describe their own situation. And often you would hear like, well, I don't have much. And I would say, but do you have enough for you? Oh, yeah, I got plenty for me. Okay, then what are you saying that for? Like I would love for us to be a little bit more proud of where we are for whatever we've chosen. And so I think it's kind of great to be able to say to somebody like, hey, you for where you are, for what the life you are living, you're in perfectly wonderful shape.

18:51It doesn't have to be anyone else's life. Jill, this has been really helpful. Thank you so much. Thank you very much for having me and we'll do it again. All right, y 'all, time for a recap. Takeaway one, look at your cash flow, money coming in minus money going out over the past three months and since the beginning of the year. Take note of any tight spots where you had to pull money from savings or you couldn't pay your credit card bill. Do your version of a company balance sheet. What do you own, including how much money you have in savings and investments, and what do you owe? Also calculate your net income, how much money you take home each month after taxes and deductions, or you could do a version of net income that subtracts all your expenses, including things like rent.

19:37Takeaway two, consider your profit margin. Take your monthly income after taxes and deductions, let's say that's$4 ,000, add up your spending, say that's$2 ,000, then calculate. $2 ,000 is what percentage of$4 ,000? It's half, 50%. So you have a 50 % profit margin for the month. Do the same calculation at different points of the year and see when your profit margin fell. Takeaway three, you can think of the last quarter of the year as an opportunity. Pick one of your financial goals and stick with it for three months. Okay, that's our show. If Life Kit is part of your weekly ritual, why not make it official on the NPR app?

20:19You'll hear about every episode the moment it's ready. Just turn on notifications and we'll handle the rest. See you there. Download the NPR app today. This episode of Life Kit was produced by Kayla Lattimore and Lennon Sherburn. Our digital editor is Malika Garib, and our visuals editor is CJ Riccolon. Megan Cain is our senior supervising editor, and Lauren Gonzalez is our executive producer. Our production team also includes Andy Tegel, Margaret Serino, and Sylvie Douglas. Engineering support comes from Peter Alina. I'm Mariel Segarra. Thanks for listening.

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