A reader recently asked, “How do I stay on top of all the automatic payments I’ve set-up? Sure, the bills are getting paid, but I can’t remember what bills I’m paying anymore or what they’re for, and I don’t know whether I’m getting ripped off.”
Ah, yes. One of my favorite topics: the weekly financial review. Before your eyes glaze over and you envision yourself surrounded by adding machines, piles of papers, and receipts galore, consider how good it would feel to know exactly how much you’re spending and to confirm what bills you’re paying, what you’re being charged, and how much cash you have on-hand…just by spending less than an hour each week participating in a painless review of your finances.
The hubster and I have gotten in the habit of taking 30 or so minutes every week to review our household finances. Words cannot fully articulate the sense of order and information empowerment that results from this exercise, and I highly recommend it.
First things first
I’m sharing the following tips with the assumption that you’re already enrolled in an online bill pay program, and that you have online account log-ins for your credit cards, banks, investments, etc. If you don’t already have these things in place, consider looking into the helpful online resources available from your financial companies.
Buy some financial software. It really does make a difference.
There was a time when I didn’t use software to track my finances. I was fine balancing my checkbook the old-fashioned way, thankyouverymuch. But then the hubster introduced me to Quicken, and after using it once or twice, I vowed never to return to the pen and paper route. While it’s not everyone’s favorite, financial software allows you to track your checking and savings accounts, credit card purchases, and investments all in one place. Amazingly enough, it’s fairly easy to navigate after using it once or twice and after you complete your initial set-up of accounts.
There are a host of home office financial software packages available, including Quicken, Quick Books, and Microsoft Money. Every program has its unique features, so be sure to read up on all of them before making your final purchase.
Now the fun begins.
Each week, set aside 30-45 minutes in which to review your household finances. I find that it’s best to do this on the same day each week (i.e. every Saturday). These ideas have helped the hubster and I, and I expect you’ll find the ways that work best for you.
First, use your financial software to download the transactions from your credit cards, bank accounts, and investments.
As part of the download process, the software will likely require you to confirm each transaction. It’s okay to be thrilled about this. This is a great opportunity for you to review the deposits and debits from your bank accounts. It’s also the perfect time to double-check each credit card transaction, and chart your investments. The occasional incorrect transaction or overcharge can easily go unnoticed. But your weekly financial review will nip incorrect charges in the bud, and keep you apprised of how much you’re spending.
Most financial software programs feature a variety of reports, including those that track your spending vs. earnings. Be sure to review these reports each week to keep abreast of your spending habits, what you’re saving, and what your weekly budget includes.
Next, log into your online bill pay bank account.
Bill pay programs allow you to manually schedule payments or generate automatic payments whenever a bill comes due. Regardless of which payment route you take, you’ll want to consistently confirm the accuracy of the services rendered and the associated charges for which you’re responsible. Consider scheduling the payments to arrive one or two days in advance of their respective due dates. And, of course, contact the service provider if you discover a billing discrepancy.
Then, log into your online credit card statement(s).
Confirm the validity of any pending transactions that may not have appeared in your financial software download. If there’s a rewards program associated with your credit card and it requires you to take action after accumulating a certain number of points or dollars, review your rewards status each week so you can take action as needed.
Now use your filing system effectively.
File all of the receipts that you acquired over the past week in your month-by-month receipt accordion file. Then put all of the credit card statements, now-paid bills, etc. that you acquired this week into their respective hanging files. Not only does this minimize clutter and piles galore, but it allows you to keep track of your financial documents with ease.
Lastly, take stock of your findings and act accordingly.
After you complete the aforementioned processes, be really honest with yourself about what you’ve discovered. Some questions to consider: How much money did you spend this week vs. what you were budgeted to spend? How much money did you earn this week vs. what you expected to earn? How many bills did you pay in-full and on-time?
Then take some time to think about what you can do differently and what’s working well. If there are areas where you’d like to improve, set realistic goals that will help you make the appropriate adjustments. You also may wish to speak with a financial adviser about some of the trends you notice so that you can better understand how to achieve your savings goals.
Knowledge is power. Your weekly financial review should empower you to be alert to what needs adjusting and correcting, and it should ensure that you’re paying your bills on time and not being over-charged in the process.
Don’t worry, nobody said you needed to buy a pocket protector to achieve success in your weekly financial review. Bedroom slippers, a mug of cocoa, and motivation make for excellent accessories.