Important Money Reviews That You Must Do

Money Reviews That You Must Do

If it’s important, it’s on our mind. We will make systems for it, be efficient about it and track it diligently. This blog is important to me, making me track views daily and various metrics on google analytics every month. I have another list of personal habits that I have started tracking to see my frequency of doing those activities, like reading a book or drinking enough water.

 

Is money important to you? Important enough that you spend time and effort tieing it’s disparate and widely-scattered threads together?

 

I was thinking about this and realized there are a few regular checks and measures that our money deserves from us. Some are daily, some monthly, while most are quarterly and some annual. Though in all honesty, I can confess that I, myself am yet to do some of them, what I am listing down are good practices. If you think you don’t have the time or the inclination to do it, you should find a good professional to help you out with these.

 

 

Daily Review

 

Spends Tracking

This is a habit that I believe can be very helpful in day-to-day money management. Read here for a detailed view of why tracking spends is important. In this age of data security concerns and for a well-categorized data set, personally, I still prefer manual spend tracking apps. With a month-long experiment checking out 5 such apps, you can read a detailed review here.

 

 

Monthly Review

Income

How many of us review our pay slip every month to ensure that our salary is correctly credited with nothing amiss? For someone with an irregular income, like entrepreneurs and freelancers, this tracking is even more important.

 

Spends

While with the daily spends, all you are required to do is enter in the numbers and details, at the end of the month, it’s good to spend 5 minutes to see how the expenses of the month look. Are they in line with what you generally spend? Was there an aberration or anything different that you did in the month.

 

Saving

This metric really depends on whether your saving is manual or automated. If it is automated through the use of SIPs and automatically debiting for Recurring deposits, then you could skip it because you then have a consistent number for this. However, in case of manual, varying amount of savings, this is another vital metric to track in a month. Did you save as per plan? If not, how will you make up for it next month?

 

Budget

Personally, I follow an unconventional method of aggressively paying myself first and using the rest of the funds to spend for the month and bill payments. However, for some people, defining the amount to be spent in each category before the month and then tracking it, works much better. Know what you are comfortable with. If budgeting is important to you, ensure you track it every month.

 

Market value of stocks you hold

Surprised at the low involvement recommended here? We all know stocks are volatile. There is enough research to show that the more feverishly we track our stocks, more likely we are to make emotional decisions around it. However, once a month, just note down the market value of stocks and do a quick check on the major happenings on them in the past month. Is there anything drastic or favorable news about the company? How might it impact the stock in the near and long-term future?

 

Bill payments (including credit card)

This is a quick one. Glance at your bills and ask yourself this – in line with an average month’s bill and paid on time? Move on. However, in case of any bill which is too high or much lower, take some time to think what could have caused it and the impact it has on your future actions. For credit card bill though,  make sure to check every line item and ensure it is something that you have purchased.

 

 

Quarterly review

 

Market value of Bonds & Mutual Funds

Mutual funds and bonds are much less volatile than stocks and a quarterly tracking of these assets works well.

 

Loan outstanding

Most of us Indians rarely look at the outstanding amount of our loans, habituated as we are to continually just pay the EMI every month. The more you look at something, the more you are liable to try and change for the better. I think this holds true for loans also. If we look at our outstanding loan amounts every quarter, it is highly possible that it leads to us making more pre-payments and finally closing it sooner.

 

Net Worth

This is an optional but good to have number, and one which is increasingly popular in the West. The best part? It is one number that encapsulates your financial health in its’ entirety. Head over to this post to know all about net worth and how to start tracking it.

 

Financial goals

Financial goals are the measure through which we give our money a job. When approached in a scientific way, goals are seen in the distance, broken into chunks and gone about systematically. Tracking of goals keeps them in view and also ensures they are on track. Ensure retirement is right up there as one of your goals.

 

 

Annual Review

 

Insurance

Life Insurance and Health Insurance are two types that you must buy at the appropriate time and in the right amount. However, life is dynamic and often changes, requiring you to make a change in these policies. For instance, the birth of a baby would mean inclusion in the health plan and possibly increase in the Life Insurance Sum Assured. For any confusions on Life Insurance, you can refer to our 5-part series that was done #LIMondays.

 

Tax Planning

While for most entrepreneurs, this is a quarterly activity especially with the GST coming in, as salaried folks, we need to ensure we are paying minimum taxes. There are enough legal and government-encouraged measures to do that. You need to ensure you save as much tax as you can and file it at the right time.

 

Financial Details docket

We have earlier discussed the importance of being financially organized and having all important documents and details in one place. Once a year, do a quick check to see that all the information is updated. You might have closed a bank account or opened a new one. Some passwords might have changed which you have forgotten to update. All those gaps get addressed in this annual check.

 

What checks or tune-ups do you do with your money? Is there something you feel is important but hasn’t been mentioned here? Let me know your views in the comments below or email me at aparna@elementummoney.com

5 thoughts on “Important Money Reviews That You Must Do

  1. We track expenses. And then look at them once a month or so. And like you do, save first and don’t keep a budget.

    This year, I have made a budget, but look at it only .at the end of the month. My spending doesn’t depend on that.it is more of a way to check if what we spend is in line with what we thought we would spend.

    1. That’s great… I got out of the habit of tracking spends on my recent holiday… Gradually getting back to it :-/

      1. Yes… And if you want to see credit card spend categories, that also doesn’t work very well here… Which is why I prefer manual spends in India

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