monthly budget reality checklist.
Hello peeps!
I’ve said it before and we’ll say it again: budgeting is the ultimate way to gain control of your spending and put yourself (not your money/bills/expenses/debt) in the driver’s seat.
So… you’re probably thinking: but wait, if it were this important, don’t you think more people would do it?
Short answer: YES!
But, we get it: life’s busy, our jobs can be demanding, and family life/priorities can easily takeover that daily or weekly to-do list, putting things like budgeting or getting financially organise on the back-burner for far too long.
If you’ve been meaning to get your financial life together, then BRAVO. KUDOS. CONGRATS. Let us present to you: our monthly budgeting routine (…aka: your new best financial pal).
Each month (usually during the first week of the new month), I tick through this checklist;
number one; we review our expenses from the previous month.
Seriously. I print out my credit card statements, review any bank or payment transactions (via apps like MAE, PayPal, or Spendee), and analyse receipts. Sure, this can take anywhere from an hour to several hours at a time, but this type of review process is critical to actually understanding your spending and overall money behaviours. We recommend adding up your spending by category (i.e. rent/mortgage, groceries, restaurants, bills, loans, subscriptions, kids’ spending, etc.) and then dividing that total by your overall income for the month. It can be helpful to take a look at each category to understand how much of your overall monthly income is going to each specific area. We know that this process can take some getting used to, but generally speaking, after a few months of sticking to this routine, most clients find that this review can be quite painless and incredibly helpful.
*Note, if you’d prefer NOT to take the time to review each statement and transaction, there are helpful tools like Microsoft Excel which does the exporting and organisation of your transactions for you.
number two; we make adjustments.
A budget should always be goal-oriented, but more importantly, it should be REALISTIC. If your spending is out of line with your budget, you’ll want to make some adjustments (likely to both your spending AND your budget structure) to keep you on task and accountable.
number 3; make sure all bills (and monthly minimums) are paid…on time!
Take a moment to document when every bill or monthly minimum payment is due and then double-check to confirm that payment has been submitted on time for each expense. If you’re unsure when certain bills are due, we highly recommend making a list or simply printing a blank calendar and writing in the company/bill as well as its corresponding payment amount into the date on the calendar when it is routinely due. This can be so critical in helping make sure you allocate your cash flow appropriately and stay on task.
number four; track progress towards your goals.
It is so important to have goals, but without taking the time to check in on them, the likelihood that you’ll achieve them is fairly small. Take the time to track your progress towards those goals you might have. How much progress have you made since last month towards those sinking funds, savings or investing goals, or debt payoff plan? Don’t forget to stop and celebrate the small wins by tracking your progress towards achieving these milestones!
number five; have a plan for leftover funds.
Occasionally when you budget, you’ll find that you have a bit of a surplus left over at the end of the month (!!). However, as exciting as that may seem, without a plan in place, it can be easy to waste that additional cash by spending it all too easily. Instead, have a plan for any “extras” and put that money to good use. Can you invest the difference? Perhaps you can make an extra payment to one of your debts or outstanding balances. In any case, have a plan, commit to your goal, and stick to it!
All the best in achieving your monthly goal!
Take care and stay safe,
EMIR
