Can you believe it is already March? Where did the time go? Trust me I’m not complaining, it probably snowed just about every single day during the month of February here in upstate New York. I am beyond ready for SUMMER.
Before you go off and start daydreaming about your summer plans I want to share a new strategy that I started implementing in my life last year and is now taking a little bit of a new spin this year.
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If you could define your financial fitness in a few words what would you say?
Being financially healthy is just as important as being physically healthy. Budgeting is to Financial Well Being as Working Out is to Health. You don’t have to be a gym rat to be healthy and you don’t have to be a financial planner to manage your finances.
This year I started to implement “Financial Fitness Friday”
Every Friday I do three things:
1. Manage my investments
I check on my rental portfolio make sure numbers are looking good, enter any new receipts or expenditures into my Income & Expenses report (aka my P&L for you fancy financial nerds out there), and pay any upcoming bills.
2. Check on my credit cards and bank accounts
I also do a quick health check on all of my credit cards and bank accounts and make sure they all look okay. In other words make sure I’m not overspending and have enough money in each account to cover my bills. I tend to pay some of the bills early or as needed throughout the month. I don’t usually wait until they are due, the way life rolls it is just so much easier for me to plan on paying them every friday vs. logging in the exact day they are due. I also set up automatic payments so that either the full balance or the minimum balance is paid when due this way I never miss a due date.
3. Manage my budget and spending
Managing a budget for an investment property is one thing and managing a budget for your personal life is another. For now let’s focus on the PERSONAL side.
I used to look at my budget all the time and I realized that I kind of stopped when my boyfriend and I moved in together and bought our house last March. Moving in with someone has its own challenges on top of starting to share expenses. Having a money conversation prior to moving in together is so important and is not something to shy away from. Moving in together is supposed to be a good thing you don’t want to put either of you in a bad financial spot or ruin your relationship.
Almost one year later I have begun to return to my old routine which I’ve shared previously in the article The 5 Steps You Need to Take to Save Half Your Salary Every Month. This past year, I still regularly reviewed our spending but I would call what I did “Budgeting Lite.” I didn’t really discuss it with my partner and we never truly set limits on our spending together. I had tried to impose limits which didn’t always go over well.
This is what I’m doing now:
I categorize our spending every month into 6 main categories - Groceries, Dining Out, Entertainment, Take Out, Miscellaneous Spending, and Josie (our dog). I export what we spend from our credit card account and put it in excel format and then I create a pivot table that summarizes our spending based on these six categories. The result is a detailed view of what we actually spent. From there we can see if we are overspending and manage our budget based on the limits that we have set. The next step is talking about it and sticking to the limits every month.
What we have yet to do is create a Savings and Emergency Savings Bucket for ourselves. For now we are doing that separately and in the future will likely create those savings bucket in our joint account. For now most of our savings goes straight into our basement rennovation.
Checking on my accounts, my investments and my budget every Friday keeps me on top of everything and helps me make sure I don’t miss any expenses or bills and keeps my budget in check.
What do you do to manage your budget on a monthly basis? What strategies have worked and haven’t worked?
Thanks for reading!
Please note: I am not a financial planner or an accountant, the advice I give here is based on my own experience and what has worked for me. Please consult a professional financial advisor before taking any action. Thank you.