This is genymoney.ca’s first ever guest post, from none other than Owen from Planeasy.ca on managing your financial routine! Normally I only accept guest posts from other PF bloggers and not businesses, but I love Owens’ blog and he’s Canadian so I made an exception 🙂
Owen is a fee-for-service financial planner that specializes in budgeting, cash flow, taxes & benefits, and retirement planning. He works with individuals and young families in their 30’s, 40’s and 50’s to create a custom financial plan and provide 1-on-1 coaching & advice. He is a member of AdviceOnlyPlanners. You can follow him on Facebook, Twitter, Instagram, and his blog.
Managing your financial routine? Routines are everywhere, we have morning routines, bedtime routines, work routines, and exercise routines. Routines help us do repetitive tasks, they help us do the things faster, they make us more efficient and they make things easier.
Routines are just a sequence of actions that we follow on a regular basis. It’s as simple as that. Sometimes we do these routines so often that we can do them without even thinking about it. It just happens.
When you have a solid routine in your life you benefit in a few ways. You have reduced stress, improved health, and you make better use of your time. When you have a good routine you know exactly what to do and when to do it. It makes things easier. Once you have a good routine you don’t have to think about what you’re doing, it becomes second nature.
Imagine if you had a GREAT personal finance routine? Imagine if your finances basically took care of themselves? Imagine if you had a routine that would let you manage your finances without much effort at all? Imagine if everything just flowed smoothly.
Managing your financial routine and having a clear and deliberate personal finance routine is the foundation of a healthy financial life.
When you have a good financial system, one that is ingrained in your daily routine, you’ll be able to take your finances to the next level and start thinking about bigger financial goals like debt freedom, investing wisely, reaching financial independence, or retiring early. Trying to achieve these goals without a good routine is like pushing a boulder uphill, it’s possible, but it takes soooo much extra effort, and you might just end up back in the same position.
That’s the benefit of a solid personal finance routine, it takes care of the mundane day-to-day personal finances and leaves you with more time to focus on the things that really matter.
What does a good financial routine look like? It’s different for everyone. But at its core, a good financial routine should cover a few things like tracking spending, budgeting, saving and regular investing.
To give you just one example of a personal finance routine I’m going to share with you how my wife and I manage our personal finances in just 4 to 7 minutes per day.
Our routine has helped us take our finances to the next level, pay off all our debt, and start investing for the future. It’s might not be the right routine for you, but hopefully, it gives you a few ideas that you can apply to your own routine.
Let’s get down to managing your financial routine.
On a daily basis, I have just one personal finance routine and that is to track my spending. I do this using Google Forms and Google Sheets. Every time I make a purchase I pull up a Google Form on my phone and add a new transaction. The amazing thing is that this transaction AUTOMATICALLY gets added to my budget spreadsheet and summarized into categories.
This is a simple and semi-automated way to track my spending. Plus, you don’t have to share your bank passwords with anyone! (If you want to try it out you can download a free budget template here)
On average I make 1.3 transactions per day, but most people make between 1 to 3 transactions, so this routine should take a maximum of 30-90 seconds per day for most people. Because I only average 1.3 transactions per day I spend less than 1-minute per day tracking my spending. That’s less than 30-minutes per month to have a great summary of your spending by category.
Total time: < 1 minute per day.
Once per week (usually Saturday mornings) I review my budget month to date, and then I pay any upcoming bills due in the next week.
I’ve simplified my bill paying routine by having most bills automatically debited from my bank account or automatically billed to my credit card (go credit card points!). For the most part, this means I’m only paying my credit card bill as it comes due. This has greatly simplified my weekly routine.
The other thing I do is I check my budget each week. This is super easy thanks to my Google Sheet. I also double check my spending versus my credit card and bank account, I want to ensure that I’ve entered all my transactions for the week, then I take a quick look to see how I’m doing versus my budget and decide if I need to make any small tweaks in the next couple weeks to stay on track.
Total time: 15-30 minutes per week.
Each month I review my budget again, this time for the entire month. Any savings I had budgeted for the month come directly off my income and into my investment account, so there isn’t much to do there.
During my monthly budget routine, I look for long-term trends. For example, I might have been overspending my grocery budget for the last few months, in that case, I’d look for a few ways to tweak my food habits to get back on track.
Making these small tweaks helps keep things simple. Rather than making one big change I try to make small changes each month. It’s less exhausting to make these small changes over time.
After a few months, these small changes still have a big impact plus it’s more likely I’ll stick to them because I’m slowly improving my spending habits rather than trying to make a big change all at once.
Total time: 15-30 minutes per month.
Up to this point my wife and I manage our routines separately, she has her own budgeting system that she prefers, but our quarterly routine is something we do together. Our quarterly routine is focused on two things, our investments, and our shared household budget. We order some take out, open a bottle of wine, and review our finances together.
We budget using the you/me/us approach. We each have our own budgets plus we have one joint budget for household expenses. We review our budgets together each quarter based on our long-term goals, but we manage them separately each month using our own routine. This gives us a bit of freedom to move money around within our own budget but still keeps us on the same page in terms of overall spending & saving goals.
We also review our investments during our quarterly routine. We review our investment portfolio, update our net-worth, and compare vs plan. We look at growth, dividends, new contributions, and asset allocation. Then we make changes if necessary.
Usually, we use dividends and new contributions to rebalance our portfolio but sometimes we have to sell investments to rebalance. We use a +/- 5% rule to trigger this selling to rebalance. So far, we’ve only had to do this twice in the last 5-years. Having our asset allocation and rebalancing rules set up in advance makes our quarterly routine even easier.
Total time: 1-2 hours per quarter.
Managing Your Financial Routine: How I Do It
In total my personal finance routine takes an average of 4-7 minutes per day. It’s easy, it’s efficient, and it creates a solid foundation for even bigger personal finance goals.
Creating a solid personal finance routine isn’t easy. It’s hard to break old habits and create new ones. Usually, it takes 12-months or more to create a good financial routine. The key is to start slow and add one piece at a time. Doing too much at once can lead to financial fatigue.
It may also make sense to get help as you build your routine. Partner up with a friend or a family member. Or get some one-on-one coaching to set up a solid personal finance routine.
Setting up a good financial routine can lead to some big improvements. It can pay back many, many, many times over the course of your life, plus it just feels good to be in control ; )
Fee-For-Service Financial Planner, FPSC Level 1 and Founder of PlanEasy.ca
How do you manage your financial routine? What are your daily, weekly, monthly, and quarterly financial routines?
GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.