How to Motivate Yourself to Go Over Your Finances Regularly

There are two kinds of people, one who manage their finances and the other who do not have any clue about their finances. Even those who manage their finances are not very regular. One excuse – “I have no time to go over my finances, regularly”. In this post, I’ll discuss steps that can help you to get motivated to go over your finances, regularly. Checking on your financial health periodically is an essential aspect of managing your personal finance.

Are you ever bored with your finances? Honestly, who really wants to review their saving and spending every month (aside from us personal finance nerds that do it weekly, just for fun)? For many, tracking income and expenses is on the same excitement level as paying bills. However, if you go about it the right way, tracking your money can actually be kind of fun for almost anybody.

Follow this five-step plan and see for yourself

1) Construct a Budget

The fun stuff is coming later, I promise, but a budget is the first necessary step so that you know your starting point. In order to improve financially, you need to know how good or bad you are doing currently. So, take a look at your bank statements for the past few months and take your best guess at how much you earn and how much you spend each month.

Write down the categories that you typically spend your money on (home mortgage, utilities, clothes, food, cable, the internet, phone, etc.) and put a dollar amount next to each of them. Then, total out both your income and your expenses.

Write down the categories that you typically spend your money on (home mortgage, utilities, clothes, food, cable, the internet, phone, etc.) and put a dollar amount next to each of them. Then, total out both your income and your expenses.

2) Make a Large, Long-Term Goal

Between you and your spouse (or if you’re single, just figure it out yourself), have a serious discussion about where you would like to be financially in the next 10 years. Would you like to be semi-retired? Would you like to live in a different neighborhood? Would you like one of you to stay at home with the kids? Maybe you want to buy a vacation home. Whatever it is that you decide, you must then figure where you must be financially to achieve your goal.

Let’s say you would like to retire in 10 years. In order to do this, you decide that you need $1.5 million in your retirement account. This is your long term goal.

3) Make many small Goals Along the Way

Sticking with the above example, your next step is to figure out what you need to do each month to achieve your long-term goal of retirement. In order to bridge the $1 million gap (to get from $500k to $1.5 million) in your retirement fund, you discover that you need to contribute $966 each month for the next 10 years (any online investment calculator can tell you this). If you stick to this monthly goal, you will be able to retire just 10 years from now!

4) Reward Yourself

Okay, we finally get to the fun part. Once you have constructed your budget, set your long-term goal, and then figured out your short-term goals that will get you there, you can now decide how to reward yourself for hitting certain goals.

Perhaps you would like to reward yourself each month for making the $966 payment into your retirement fund. Let’s say you would like to go out to eat and celebrate each month’s success. Just put this into the budget and reward yourself each time you make this payment!

Then, maybe you would like to take a yearly vacation each time you complete 12 straight months of payments; put this into the budget and take those vacations!

When you set up rewards for yourself and you are working toward an exciting end goal, tracking your finances can be pretty fun. However, be careful not to reward yourself if you do not hit your mini goals. This isn’t 1st-grade soccer… you can’t always be a winner. Reward yourself for your successes and you will start to have a blast with your financial success!

5) Use personal financial tools

I admit logging on to your financial accounts, banks, cards, investments, 401 (k)’s, Cd’s and what not, is a mundane task, not very exciting. You’ll soon lose interest in going through your finances. Thankfully, there are few personal finance tools available, where you can monitor all your financial accounts, with just one login. And most of them are free for use.

Even before becoming a blogger I had accounts with Yodlee and Mint. But since 2014, I started using PersonalCapital. This is a free tool to use. Only when you need their help in managing your investments, you’ll have to pay a fee. I do use the free version, though, as I manage money on my own.

Once you sign up for a software, you’ll have to link your financial accounts (one time task). So from next time, you’ll just have to log in to see your total asset, net worth, cash flow, investment performance, total debt, etc. on a single screen.

Having a personal finance software is a must for going over your finances regularly, as this makes the checking your accounts simpler and straight forward. You save on time and you get instant figures which are taken from all your individual accounts.

Do you go over your finances regularly?