Getting your finances in order is not something that happens naturally for most. That was definitely not the case for us; it took a lot of hard work, determination, and persistence. What made that work easier was creating a routine for our finances, and it reduced our stress levels regarding finances in the process. In this post, I’ll break down how we created our budget routine, and walk you through how to create a budget routine that works for you.
- How To Perform A Budget Review
- How Using A Calendar Can Improve Your Finances
- 40+ Financial Habits You Need For Success
As with any financial advice, take what pieces work for you and your unique financial situation. These are merely guidelines on what has worked for us. You need to tailor your routine to your current financial situation.
By the end of this, you should be able to create your own budget routine, tailored to your specific finances.
What To Include In Your Annual Budget Routine
Once a year it is a good idea to set some new financial goals and priorities, and any financial habits that you’ll want to achieve – or even make progress on – throughout the course of the next 12 months. The best part is you don’t have to wait until January to reset your finances. Any point in the year can be a good starting point. Our annual reset actually starts in the middle of December, with our December paycheck.
In the weeks leading up to our reset, we set new financial goals and annual sinking fund amounts. We base the current year’s amounts off of the previous year’s spending. For example, last year I had our medical sinking fund set to save up $1,500 over the course of the year. For our budget, this money goes towards co-pays, deductibles, prescriptions, and any other medically related out-of-pocket expenses. However, over the course of the year, we actually spent closer to $2,000. So this year, our medical sinking fund is set to $2,000.
What about a semi-annual budget routine?
Every 4 – 6 months, we look back at our financial priorities and goals. Use this time to see what progress we have made on them, what progress is still yet to be made, and if there are any goals we would like to scrap for the year and shift our attention to other pressing financial matters.
In 2020, we had our goals set for paying down a large chunk of our debt. However, there were other factors we didn’t consider at the start of the year – like months of quarantining, combined with potential job uncertainty and income instability. At that time, we shifted our priority to savings rather than debt.
Don’t be afraid to change course if it’s what is best for your unique financial situation.
Some things to include in your annual & Semi-annual budgeting routine are:
- Create annual financial goals
- Determine your sinking funds and their amounts
- Reviewing financial goals
What to include in your monthly budget routine:
This is where your budget routine may start to vary. Personally, I do not like the idea of setting a budget at the start of each month. There are so many variables to consider with each paycheck, that unless you are paid on the first of each month or working off of last month’s income, setting that monthly budget isn’t necessary.
We are paid once a month, but it’s on the 15th of each month. Once a month we do set a zero-based paycheck budget, but the budget runs from the 15th of one calendar month to the 14th of the next. If I tried to fit our paycheck to the entire calendar month, we would be short money before we were even paid.
When we were paid weekly, we did not set up a monthly budget. Instead, we followed the You Need A Budget* method combined with a budgeting calendar, and allocated our income with each check to the financial priorities of the week. Even though we are paid monthly, I still follow this method of budgeting.
As we set up our zero-based budget for the month, we also review the previous month’s budget. If we came under budget, I allocate the remaining money to our current financial goal; right now, we are focused on paying down debt.
We then review any upcoming expenses that we may need to save for (like school supplies) and adjust our sinking funds as necessary and check our supplies of household items I buy on a monthly basis. It does not help our finances if I have 10 bottles of shampoo and 0 bottles of laundry detergent on hand.
Some things to include in your monthly budgeting routine are:
- Challenges to complete, like a no-spend challenge
- If you are paid monthly, set up your zero-based budget and review your last budget
- Savings goals to meet for the month
- Financial priorities to add
- Check-in with financial obligations for the upcoming months
What should my weekly budget routine look like?
If you are paid weekly, you should set up your budget for the upcoming week.
Every week, we create a meal plan and grocery list based on what we have in our pantry, freezer, and the schedule for the week. If it is a busy week with school activities, planning for complex meals that take an hour to make is not ideal. We also do our grocery shopping once a week.
Since we are paid monthly, I usually schedule our bills every other week. There are times where I schedule them weekly though because that is what better fits our schedule at that time.
When I schedule our bills, I also review how our budget is coming along, meaning that we review our current spending, and adjust any categories that we may have spent more or less than what was originally anticipated. This wasn’t a necessary step when we were paid weekly, because we would do the review each week as we reconciled the paycheck and prepared for the next.
how to create your Weekly budgeting routine:
- If you are paid weekly or bi-weekly, set up your next zero-based budget and review the previous budget
- Schedule any payments due
- Assess your current spending in your budget categories, and adjust as necessary
- Add any short term financial obligations (birthdays, etc)
- Create a plan and a meal plan and grocery shop for that
Your Daily Budget Routine
This has to be the easiest part of your budget routine. If you’ve set up the proper groundwork, your daily budget routine is simply sticking to your plans!
If you opted to complete a no-spend or daily savings challenge, it’s good to check in with them each day to continue your motivation going forward!
how to create your Daily budgeting routine:
- Stick to your meal plan and eat at home
- Compile any receipts for the day (fuel, groceries, etc) in one spot for easy access to review.
- Check-in with any budgeting challenges you are completing, such as a no-spend challenge, or daily savings challenges.
My Budget Routine
I’ve talked a little about what portions of our budget routine I incorporate throughout this post, however, I do keep my routine printed and in my budgeting workbook. It’s a nice way for me to keep track of what I should be doing.
To create your own budget routine, there is a printable to help guide you through it in my free resource library.
What are some vital items you include in your budget routine? I’d love to know in the comments below!