If you could do one thing per month that would guarantee that your financial life would improve, would you do it? Maybe you already are...
One of the aspects of my professional life that I most enjoy is the fact that I regularly get to teach financial literacy classes to college students. I talk about debt and student loans and budgeting and the perks and perils of credit cards. I enjoy getting to tell the students all the things I wish I had known when I was young and financially stupid and often they ask me great questions.
Last month I taught a class and a student asked me what my number one piece of money advice was. He seemed a little disappointing that the answer wasn't something sexy like a great stock tip or some fool-proof investment strategy. My best piece of money advice was simple: make sure you do a monthly money review.
At the start of every month, I take about an hour and do some basic but important things: I balance the checkbook, pay all the bills (we are on a cycle where all the major bills come due at the same time), update our savings tracking sheet (a simple table I keep that shows how much money we have in savings as of the first of the month), and update our spending sheet (another simple table where I enter how much money we spent in categories like "eating out", "groceries", "clothing", "household", etcetera).
Once I'm done updating all of that, I print off the savings and spending sheets and my husband and I look them over together. We want to see if our savings went up or down that month and if there were areas where we overspent (there usually is and 90% of the time it is in the "eating out" category, our biggest budget struggle). We started doing these monthly check-ins when we were trying to get out of debt and found that the accountability of really tracking where our money went every month helped keep up on track with our financial goals.
I strongly believe that you can't improve your financial life if you don't start by being honest with yourself and your partner (and having them be honest in return) about where your money is going and the monthly check-in makes that honesty a regular part of your life.
Do you, and your partner if you have one, have regular financial meetings?