There are very few things in life that work automatically without any effort. Losing weight without effort doesn’t work. Advancing your career without effort doesn't work. Getting your money in shape each month without effort doesn’t work as well.
Money dates are a critical part of a successful monthly money system and should be done around the same time each week
Having a monthly money system in place allows your money to work in all the areas you need it to — retirement savings, goal savings, budgeting, planning for the future, paying down debt, etc. There are three steps you need to take to build your monthly money system.
Have Effective Money Dates
Money dates are a critical part of a successful monthly money system and should be done around the same time each week. Contrary to popular belief, a money date with yourself or your partner can be completed in as little as 15 to 20 minutes per week, and you won’t even break a sweat.
There are three main components to an effective money date:
Create an Atmosphere
Whether you go to a favorite wine bar, set up a picnic in the park or create a cozy corner in your house, setting the mood for your money date is imperative. Why? Well, money is a taboo subject filled with stress, anxiety, fear and doubt. If you can create a good atmosphere around your money date, you can train your brain to look forward to these weekly money dates.
Bring your laptop, phone, pen and paper and whatever tools you need to access your finances over the last week. The goal of the money date is to look back at the week prior and track what went on with your spending and to look forward to the upcoming week and set some goals for your spending and saving.
Set Some Goals
Goals work best when they’re broken down into manageable bits so you can achieve them over time. Use your money date to set new goals, track goals you’re already working toward and allow yourself to daydream about the future. Money is just a tool to achieve your goals, and money dates work to give your money an action plan.
Track and Adjust Your Spending and Saving
The purpose of a monthly money system is to keep you on track with your spending and savings plan. There are so many great mobile apps out there to help you track and adjust your spending and savings plan. Here are a few of the most popular apps:
You certainly don’t need to use an app to track your spending and savings. You might be a fan of Excel, or maybe you like Post-It notes as a visual reminder of where your money is going. Whatever system you decide to use works.
The goal is to track your spending and savings over the month and make changes week to week whenever you get off course. For instance, if you notice you’re overspending on eating out this month, you might set a goal for the remaining weeks to keep your spending within a limit. By doing so, you’ll be able to hit your other goals for the month of savings and paying down debt.
Create a Goal Based Budget
Most budgets fail because they were never set up to succeed in the first place. Let’s admit it: We’ve also grown up with a predetermined distaste for budgeting. However, a budget is one of the most important tools you have to achieve your goals.
If you hate the word budget, a great trick is to change the name. If you love to travel, your budget might turn into your “travel itinerary,” or perhaps you name your budget a place you want to visit. It sounds silly, but these little tricks work.
Your budget should be a reflection of the goals you’re trying to achieve. If you want to save $5,000 for a trip to Greece in a year, include $416 on your budget as a Greece savings category. No matter what your goals are, they should be represented on your budget and backed up with action so every month you’re taking small steps towards achieving your goals.