5 Monthly Habits That Are a Key Part Of My Money Routine
I’m not always the most organized person that I could be. After all, I live a creative life and sometimes creativity is messy in the best possible way. However, I do think it’s important to stay organized when it comes to finance. For me, routines are key to organization. So, today, I wanted to tell you about five of my monthly habits that make up the foundation of my money routine.
Organized Finance Are Critical
First, though, let’s talk about why it’s so important to have organization when it comes to money. You can’t just stick your head in the sand where your finances are concerned and hope that the mess works itself out. Rarely will it work out.
Moreover, you can create a lot of problems for yourself if you allow finances to become disorganized. For example, you might miss payments, leading to extra charges, lower credit scores, etc. Even if your payments are all automated, like mine are, you might miss realizing that an error has caused an overdraft or other such problem.
More than that, though, at least for me, is the psychological component of financial organization. If I’m not organized about my money, then my money feels messy. This makes me feel out of control and stressed out. As a result, I make more bad financial decisions. Getting organized increases a sense of autonomy, accountability, and control.
5 Monthly Habits That Are a Key Part Of My Money Routine
In order to organize my finances, I stick to a routine. There are certain things that I do every single month as part of this routine. Here are five of them:
1. Review Previous Month’s Spending
There are so many different ways to track your spending, so you have to find what works for you. Some people use apps that track spending categories, for example. I, personally, am a pen and paper kind of person. Even though I make use of plenty of digital financial tools, when it comes to really understanding my money, I always work it out on paper.
Therefore, on the first of each month, I sit down and review the spending from the previous month. I go through each credit card statement and add it all up, figuring out how much I spent in each of many different categories. As I do this, I always look for where I can make changes moving forward. For example, I question whether I still want to keep paying for each subscription. I consider where too much money is going and how I might prefer to spend it.
For some people, a monthly review like this could be too much. Quarterly spending reviews are a common practice. I find, though, that I have a better sense of my money and how I want to use it to align with my values when I look closely at this information every single month.
2. Establish New Month’s Budget Including Debt Repayment Plan
I use the information from my spending review to set a new monthly budget. Of course, my budget doesn’t change significantly from month to month. After all, I’ve been budgeting for quite a while, so I generally have a sense of how much money I plan to spend in what areas during the month. However, it’s always good for me to look realistically at my financial situation and tweak things here and there.
As part of this, I always review my outstanding debt. I look at whether any low-APR promotional periods are coming to an end. I review whether I can devote more money to debt repayment. For example, if my financial review shows that I spent a lot of money the previous month on dining out, then I might set a new budget that strictly reduces that spending and put that money towards debt repayment instead.
3. Send Invoices and Review Past and Projected Income
I send monthly invoices to all of my clients. Thankfully, I’m currently in a position where I have no problems with any payment. In the past, I had to make sure that clients had paid outstanding bills, etc. Right now, I just write up and send the invoices, then double-check to make sure all has been paid from the previous month. It’s a smooth process, especially because I update the invoice details throughout the month so they’re basically ready to go on the last day of the month.
At this time, I also review what I earned in the previous month. I schedule my work calendar for the new month. Then I review my projected income for the new month. During this process, I consider potential areas for business growth. Is it time to raise prices for any clients? Are there any clients that I could upgrade to a higher level for increased income? Etc. I don’t typically make those changes monthly. Instead, I do that quarterly. However, I review it monthly and make notes so that my quarterly reviews go smoothly.
4. Digest Financial Media
Not every part of my routine is about sitting down and looking at my personal money situation. Obviously, that has to be a key part of it. However, financial growth has many different components. Some of them are actually lots of fun. For example, I make it a point to regularly digest financial media throughout the month. What do I mean by that?
- Listening to money podcasts
- Reading books about finance
- Watching money documentaries
- Taking workshops about money
I don’t focus just on money, per se. This part of my routine includes media about business, chasing creative dreams, work-life balance, etc.
5. Conversations About Money
Money has the potential to affect many of our different relationships, especially with our partners and family members. It’s not easy to talk about money. However, the more you practice, the easier it gets. Personally, I find that it’s best to have regular check-ins about hard topics, rather than letting them build up to the point where someone says, “we’ve got to talk.” Therefore, I make it a point to make sure that I’m talking about money (among other challenging things) at least monthly with the people in my life who matter.
What are some key parts of your regular money routine?
Kathryn Vercillo is a professional writer who loves to live a balanced life. She appreciates a good work-life balance. She enjoys balance in her relationships and has worked hard to learn how to balance her finances to allow for a balanced life overall. Although she’s only blonde some of the time, she’s always striving for total balance. She’s excited to share what she’s learned with you and to discover more together along the way.