We are almost halfway through the year, making it the perfect time to evaluate your systems and habits. One crucial system to review is your money routine.
What is a Money Routine?
A money routine is a set of habits and practices used to manage your finances.
Why Create a Money Routine?
Just like your daily routines—making coffee, stretching, or scrolling through your phone—a money routine can become a habit.
Frequencies of Financial Routines:
Money routines can be annual, quarterly, monthly, weekly, or daily
A common question I receive, "Melissa, how often should I review my finances?" The answer depends on your situation, but here are some standard practices that I and some of my clients tend to follow:
Annual:
- Income and Expenses: Review your annual income and expenses. What value did you gain or lose from expenses? How do you feel about your income level? A tracking system can help evaluate these figures efficiently.
- Goals: Check short, medium, and long-term goals. Are you on track? If not, why? Do you need to adjust your goals?
- Loans: Review your loans. Know the expected payoff date.
- Insurance Policies: Has the value of your home increased? Do you need to adjust your coverage?
- Charitable Contributions: Reflect on your contributions and plan for how you want to help others in the coming year.
- Credit Card Benefits: Review current benefits and options. Check resources like The Points Guy for recommendations.
- Quarterly:
- Credit Report and Score: Understand the difference between the two and review them. More info here.
- Investment Allocations: Review and adjust as needed.
Monthly:
- Checking Accounts: Ensure all transactions are correct and adjust or cancel auto-pays if necessary.
- Savings Accounts: Confirm automatic savings are happening and directed to the right places.
Weekly/Daily:
- Daily/Weekly Check-Ins: The frequency of these check-ins depends on your current financial situation. If you're just starting to earn money, merging finances, or managing significant debt, more frequent check-ins are necessary. This involves ensuring you have enough funds to cover upcoming bills and evaluating any irregular expenses.
Regular Reviews: Even with automation, regularly reviewing your expenses—biweekly or monthly—ensures your spending aligns with what’s most important to you. This practice fosters meaningful dialogue with your spouse or serves as a valuable self-reflection if you're single.
Your turn…. What does your current money routine look like?
