I don’t know if you’ve figured this out about me yet, but I’m kind of a data nerd. I believe that just measuring things over time inevitably improves them. (And I have the data to back it up!)
Not everything we want to improve is quantifiable though. (Still trying to figure out how to quantify happiness over here.)
Our financial health isn’t based on a number but on a practice.
It’s not about what you HAVE but what you DO with what you have.
Let’s spruce up your finances with some easy peasy monthly habits, shall we?
While I recommend checking in on your finances somewhere between every few days and every couple weeks, there are some money moves you should make at least every month.
Monthly tasks don’t sound too overwhelming, do they? That’s only 12 times each year. You have time for that!
I totally understand that getting into a new habit is hard. (Hey, guess who’s still guilty of checking her email first thing in the morning – whoops!) But it’s never too late to jump back on the horse!
Whether you’re making bank on your financial goals or you’re guilty of letting it ride for too long, let’s set you up for success.
CLEAN OUT YOUR WALLET
I’m one of those Magic-Art-of-Tidying Crazies and even my wallet gets a little cluttered from time to time. It’s easy to get flustered by a messy wallet and overdraw your account with the wrong card or not realize you’ve ran out of cash and have to charge your purchase. Lose the overwhelm with a minimalistic approach.
Keep your driver’s license or some form of ID, your health insurance card, a debit card, and/or a credit card if you’re using one for perks, and uncrumple your cash. Everything else can hang out in your freezer (or wherever you keep your emergency stash – is a freezer weird?).
LOOK BACK AT YOUR SPENDING
Good gravy, this is my favorite! I have a tutorial HERE demonstrating how to use spreadsheets and pivot tables to review your historical spending and map out your new budget using averages. This never fails to give me a thrill! Especially that year when I discovered my dogs cost me a whopping $1,800 because they’re so clumsy…
If you’re strictly a cash spender, you won’t have much data to use besides your ATM withdrawals. Unless you’ve been manually tracking your spending, then hallelujah, you’re too cool for school!
Keep tracking your expenses every month. If you can’t look back this month, start tracking now so you can do it next month. Do this exercise! I PROMISE it’s really cool.
CHECK YOUR NET WORTH
Your net worth does NOT equal your self worth, but I find it really fun to see how this figure changes month over month. Your net worth is a great snapshot of your financial life (like when your doctor weighs you at your annual physical – except you won’t get scolded if this figure goes up!).
So, this is simple. In one column add up all of your assets from the cash in your wallet to the value of any property you have secured debt against (like your house or car).
And then in another, add up all of your debts from that $20 you owe a friend to your student loans to your mortgage. Assets minus debts equals net worth.
MAKE A PLAN
Okay, okay, I can’t help but plug myself here, but this is what I get paid to do if you’re interested in hiring this project out. OR you can bite the bullet, lay out all of your numbers, set some goals, and go for it!
It’s just a plan, you can keep adjusting it as needed, but just set yourself up to start already! Do this before a new month starts so you can hit the ground running come the 1st of the month. A good budget is flexible and has room for adjustments so if you’ve been struggling with the same budget for the past year, switch it up!
ORGANIZE YOUR TAX DOCS
Even if you don’t have all of your year-end tax forms yet, I’m sure you have plenty of monthly bank account and credit card statements plus all those receipts for tax-free purchases you’ll be deducting on your taxes. I’m talking doctor’s bills, insurance premiums, donations, etc.
Gather everything you have so far and stash it in a folder (either physical or virtual). Having a stash of tax docs is way more manageable than tracking down 12 months of paperwork. No need for you to stress over your taxes at the last minute!
SET WEEKLY MONEY DATES WITH YOURSELF
Once you start holding formal reviews with yourself, you’ll only have to give yourself one assignment per week for the rest of the year. I’m talking reviewing your credit report, checking on your investments, and so forth. The weekly approach helps prevent you from feeling overwhelmed by all of the to-dos you’ll set in the name of financial well-being.
Literally, put them on your calendar and don’t flake out on yourself. You’ll have yourself to answer to next year and you mean business!