Getting your money under control requires organisation, and the key to good financial organisation is to work to a schedule. Here are the essential elements you need to consider to set up your own money management schedule.
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Base Your Schedule On Your Pay Cycle
This may seem an obvious step, but surprisingly people do overlook it: you need to organise your finances based on how often you get paid. That could be weekly, fortnightly or monthly, depending on your employer. If you have multiple part-time jobs, it could even be a combination of those.
That doesn’t mean you can’t work with smaller units. If you’re trying to restrict cash spending, assigning yourself a weekly amount can be sensible, even if your pay cycle is monthly. But knowing the date on which your salary lands in your bank account helps you plan how to effectively deploy that money.
Identify The Dates For All Your Key Bills
The next key element is to identify when all your key bills fall due. Gather up copies of your regular bills: credit cards, phone, broadband, electricity, car repayments. Also remember to include annual expenses: car, home and contents insurance, registration, any professional associations. Check your credit card statement for regular expenses which you don’t receive individual bills for (such as entertainment subscriptions or club dues).
Chances are these dates won’t always be in the ideal position. My credit card falls due exactly two days before I get paid each month, so I have to make sure that I’ve taken that into consideration when I’m planning my spending. Similarly, my mortgage payments are due exactly a fortnight after I get paid, but automatically transferring them into the relevant account for withdrawal by the bank on that date means I never have to think about them.
Make note not only of when your bills fall due, but also when they’re issued. That way, you’ll know if a bill hasn’t arrived when it should have, and you’ll also be able to check if it’s accurate before it falls due.
Automate Everything Possible
Automation is your friend. Having bills paid automatically when they fall due saves you worrying about overdue payments. And once you’ve identified when key bills fall due, it’s easy to have them paid automatically without suddenly feeling as though you have run out of cash. You’ll typically have multiple options here: using BPAY, setting up direct debits, or setting up payments automatically from a credit card are the obvious ones.
Schedule Time To Check Variable Bills
While you can rely on automation to pay bills, that doesn’t eliminate the need to check them — especially bills like power, water or phone charges. Mistakes happen with these, so you need to review them when they come in and make sure they’re not excessive. If they are, it’s better to contact the provider and challenge them before they’re paid, not afterwards. Set an appointment in your calendar for when those bills arrive (see, that list is being useful again) and take the time to review them.
Put Regular Reviews On The Calender
Your budget needs will change over time. Don’t just assume that the approach you’re using now will continue to work. Set an appointment on your calendar to review your finances and make sure everything is working. At a minimum, you should do this every six months.
Make Time To Educate Yourself
These steps will help you organise your current spending, but they won’t help you plan for long-term wealth. Set time in your calendar to learn more about finance so that you’re confident that your future will be prosperous.