My Weekly Personal Finance Routine

net worth workoutAlmost as soon as my review of Susan Feitelberg’s The Net Worth Workout was posted, several readers wrote to me with great interest about my own weekly personal finance routine. One came from Alex:

How exactly do you fill an hour and a half each week working on your personal finances? I only need to spend a few minutes. Isn’t an hour and a half kind of a waste of time?

I should point out here that I actually spend a lot more than an hour and a half a week thinking about personal finance – after all, I spend a lot of time doing research explicitly for this site. I spend my weekly personal finance session focusing entirely on my own financial situation, although it quite often produces a good handful of ideas for The Simple Dollar.

So, how do I fill this hour and a half each week?

I make sure all my bills are paid. This involves going through all of the mail received in the last week, pulling out the bills, and paying them using online banking. I also pay several bills by checking their balances online on the first Sunday of the month and paying those with online banking.

I check all of my accounts just to make sure they’re in good standing. This usually involves logging onto a small handful of websites and checking my statements and recent transactions there.

On the first Sunday of each month, I prepare a monthly personal finance statement. This usually takes about an hour or so, since it requires collecting a lot of data from various places, organizing it, and doing a lot of comparisons to earlier months (mostly for my own interest).

I read prospectuses for the index funds I’m invested in or considering investing in. Lately, I’ve been reading a big pile of prospectuses from Vanguard. This way, I gain a strong understanding of what their funds are actually indexing and whether or not I want to invest in them myself.

I do research for upcoming major purchases. Lately, this has mostly involved research into automobiles. I take down a lot of notes, then compile them into useful “talking points” for the decision my wife and I are making.

I engage my wife in discussions on some of these issues. We talk about our goals. We talk about how our investments and income are doing. We talk about our plans for big upcoming purchases. We talk about our dreams, too, and about how they’re constantly evolving and growing and changing.

Each week, I try to learn about something new. Sometimes it’s a skill that could be useful for saving money. Other times, it might be learning about how a specific type of investment works. Quite often, the things I learn about here translate directly into Simple Dollar posts, but I do this learning for my own personal growth and I’d do it regardless of whether or not I was writing The Simple Dollar.

This stuff easily fills an hour and a half. In fact, the “hour and a half” is usually just the length of my children’s nap. If they nap for longer, I dig a little deeper and keep reading.

Because of this routine, I feel myself understanding more and more about some of the nuances of how to manage money. I’m more in touch with my risk tolerance, for one, and my knowledge about specific investments seems to be growing by leaps and bounds.

Why not give it a try? You don’t need to spend an hour and a half – just set aside a half an hour each weekend to do this and grow it from there if you feel it’s appropriate.

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30 thoughts on “My Weekly Personal Finance Routine

  1. Michael says:

    Although I agree with this very much, I often find that always thinking about money causes personal distress.

  2. Megan says:

    I see how this could easily fill an hour and a half. What I wonder is, as you have made your way down the road of financial recovery, are you spending more or less time on this than before when you were just learning about personal finance?

    It seems to me that you are likely spending less time, since you have the basics down pat. I think a comparison of “then” vs. “now” could be quite informative.

  3. Neal Frankle says:

    I am humbled. I’ve worked with money for 25 years and I don’t do these things. My routine is:

    MONTHLY – run a P&l and discuss spending patterns with my wife Mimi. Are we on track or not?

    MONTHLY – rebalanance portfolio if needed

    WEEKLY – Download credit card and checking account info to Quickbooks (I use for both personal and business) and make sure I have enough cash.

    DAILY – read blogs and Investors Business Daily

    AS NEEDED – overall strategic planning with Mimi

  4. Dave says:

    Quite interesting – I spend about half an hour each week dealing with everything. Being in college, I don’t have much in the way of expenses, so it’s easy for me to manage all of my bills in a few minutes. Each week I make sure that I’m keeping to my budget; what I really should be doing is tracking my expenses a bit more closely. Since I don’t really buy anything besides basically the necessities (rent, food, my phone bill, and gas), I don’t really spend too much time on that stuff either.

    I spend more time reading personal finance books than anything, I’d say.

  5. Erin says:

    I easily spend an hour and a half going over finances… the family budget, goals, upcoming expenses, etc… Yeah it takes time but I sleep better knowing where I stand financially.

  6. Gabriel says:

    This is really inspirational. I have to admit that I don’t really track the income I make from my blog on side businesses. It seems like with that topic, I should!

    That’s what you get for being a naive college student :)

  7. PF says:

    This is very timely. I need to start doing this weekly rather than haphazardly. However, I’m using Mint.com and it does a fantastic job of bringing all the financial data from multiple accounts, including retirement accounts, to one place. It has great visual tools that allow me to track my spending. I can put in budgets in certain categories. I can do all my tracking in one place. I love mint. I would have never known about it if not for you. Thanks!

  8. Srikanth says:

    Yes i do this every month. It just takes me 2 hours to do it.

  9. This is great. I have a feeling many, many people are confused financially because they don’t simply sit down and think about things. I’ve had to teach myself to turn off the TV, fire up Quicken, and do some digging. If you’re not doing some kind of review session each week, you’re heading for a financial swamp.

  10. Cheryl says:

    I manually enter all of my transactions into MS Money, purely for the fact that I have caught transaction errors this way. I fear that if I automatically download all of my transactions, I will miss an error. Yes, I have found an average of 3 or 4 errors each year. Plus, I know exactly what amounts have not cleared. I obviously go ahead and enter the outstanding transactions so I know the true amount that I have remaining. If a business does not clear your account in a timely manner or someone holds your check for a few weeks, you may get in trouble if you do not account for those items.

    I spend about 5 hours once a month entering receipts and checks, then checking each transaction on my monthly bank statement against my records, reviewing budget and spending reports, and paying all bills for the month (all but one is automatic withdrawal– and then those darn medical expenses with physicians who do not permit online payment). I dread those nights, but I do feel better afterward because I know exactly where all of our money has gone and what we have left (if we have any left!)

    Any suggestions about a faster way to do this? I have made a list of the steps I follow each month so that it will go more smoothly, but it still takes a while.

  11. DB Cooper says:

    I actually enjoy spending time doing my “banking” as I call it. For me, it’s not a waste of time, but rather almost a bit of a hobby. I enjoy reading about personal finance, researching various topics, and making money decisions.

    I coach cross country in the fall and track in the spring, and during those seasons I have much less time. But during the winter, as well as the summer (no work), I don’t find that the time involved is an issue.

  12. jarebear says:

    i know you’re an excel spread sheet kind of guy, but Mint.com does about half of this for me. Makes a lot of it a total breeze! I automate almost all my bills, so it all pops up on my credit card statements along with other spending — so i get a budget report whenever i want it, get emailed monthly and weekly financial summaries, track my student loans, credit cards, and checking/savings in one spot.
    i’ve been with them for a year — a few kinks here and there but over all i love it.

  13. imelda says:

    This is a very useful post, Bruce, and contains some great ideas!

  14. imelda says:

    Wow, clearly my mind was elsewhere. I meant Trent, of course!

  15. KC says:

    I don’t see balancing your checkbook, but perhaps that’s included under checking your accounts. I balance our checkbooks and money market weekly.

    And like you I’ve been looking over a few prospectus’ lately, too. I’m also perusing over some possible stock purchases and doing the necessary research. It is time to think about buying again.

  16. Kim says:

    Wow. Y’all are so much more organized than me. Most of the time, on payday, I go into the checking account, check the balance, flip over to the bill pay, pay what I can, check what’s left and go get cash for groceries/gas/incidentals, etc. Then repeat on the next payday. Admittedly, it’s not the ideal system, and it doesn’t work that well sometimes, though.

  17. Carmen says:

    Presumably the bills you are receiving that require manual payment are few and far between; possibly annual insurance or car breakdown renewals. All our household bills are set up for monthly direct debit payment, an automated process. Aside from saving time, most companies offer a small discount for direct debit payment resulting in costs savings too.

    I also input all our expenditure into a monthly spreadsheet so I can check our actual vs budgeted spend, but now that I’ve been doing this for a year, I’m thinking of stopping and saving the time for other activities. Ideally some income generating ideas I have.

  18. Agatha says:

    Why don’t you set up your bills for direct debit payment? It’s automatic! :-)

    I have ALL my bills and I mean, ALL OF THEM, on direct debit payment. I never had to worry about missing a payment, it’s makes life SOOOOO much easier!!!

  19. Mule Skinner says:

    On Friday night when I get paid, I go cash the check and head for the bars. Then, on Monday morning I borrow a buck for bus fare and go to work.

  20. Jen says:

    @Mule Skinner: Thanks for the laugh! I almost lost the drink of water I had taken just before reading your post. :)

  21. DB Cooper says:

    @ Agatha ~ I pay my bills online through my credit union, but I do it manually. How do you account for electricity and cell phone bills that fluctuate monthly?

  22. Trent, I remember around Christmas you reviewed an excellent book called “Outliers: The Story of Success.” In that review you pointed out how people who become extremely proficient in a skill spent at least 10,000 hours of practice time.

    You have taken that to heart.

    I think the hours you put into reading in the financial genre and taking care of your own business definitely help you give us important, accurate, and first class information. You know, in another 10 years, you could overtake Warren Buffet.

  23. smurfett says:

    It sounds like you could save some time by setting somethings up to be automatic. I have:

    1. moved most of my stuff to automatic bill pay by signing up w/ each credit card or utility companies manually.

    2. Invested in software such as Quicken. It allows you to automatically download transactions and gives me a budget comparison report.

    #1 & #2 combined saves me my balancing checkbook time.

    I also had online statements for most of my accounts. I used to check it religiously every month to download the statements. But I find that it’s really a waste of my time. If I manage my money well, usually there shouldn’t be problems to begin w/. Now I do it every few months.

    Also have invested in a nice scanner so that I no longer have to manually file all the papers (and have to find space for) that some companies still insist on sending me. Having it in a computer also makes it easy to search and lookup

    All this takes some time to set up but it definitely saves time down the road.

  24. Marianne says:

    I’m a stay-at-home-mom and I really enjoy managing my personal finances so I spend a little bit of time on this every weekday while my kids are eating breakfast. Each day:

    -I download my transactions into Quicken from my bank accounts and CC accounts. I don’t tend to enter anything into Quicken manually; I just wait for it to show up at the bank/on the CC, which I realize is less than thorough, but my husband is terrible about keeping receipts and I’d have holes in my data either way.
    -I enter the downloaded transactions into my budget spreadsheet in Excel (I hate how Quicken organizes the budget so I do it my own way in Excel… more work, but infinitely less annoying).
    -I send a quick e-mail to my husband with the updated budget figures for his work-lunch budget so he can see how much he’s spent/has left to spend for the month and decide on lunch accordingly.
    -I check for e-mails, make phone calls, and prepare snail mail for things regarding personal finance (check for auto-payment notifications, call a service provider to get rates lowered or ask questions about a bill, mail the few paper checks I need to mail to people like my gardener and pool-cleaning guy, etc.)
    Time spent: about 7 minutes, 10-15 if I have to make phone calls or write checks.

    Once a month:
    -At the beginning of each month I go over the previous month’s figures, make sure everything matches up with what quicken/my online balances say, put together and print out some reports through Quicken and from my own budget/forecasting/net worth spreadsheets, and spend a few minutes reviewing my savings/investment goals. This takes about 30 mins. I spend another 10 minutes showing this paperwork to my husband and we discuss anything that either of us feels is salient.

    I do spend about an hour a day surfing around and reading personal finance blogs, but that’s just because I find it interesting. I’d likely be surfing around looking at other stuff or facebooking anyway, so it’s not really extra time spent.

  25. !wanda says:

    @KC: What does balancing a checkbook entail? I mean, I go to the bank’s website every other day or so to check on how the deposits and expenditures are going and eyeball it to make sure the math is right, but it doesn’t involve much active effort on my part.

  26. PF says:

    We got a $1500 gas bill once because the guy read the meter wrong. I’ll never trust them with an automatic payment! Most of the others are automated, however.

  27. Ron says:

    To save you some time on checking your acoounts by gathering from different places. You should try out MINT.COM It gathers all your accounts in 1 place. banking and investments can set up budget etc. its a realy good site

  28. Agatha says:

    DB Cooper, all my bills are automatic debit, even the ones that are not fixed. I have my heating/eletricity/gas in an equal payment plan, so every month I paid the same, regardless of how much I really used. Once a year, an adjustment is made to my plan.

    For internet/cable/phone/cel, it’s also automatic debit and I can make a guess of how much it will be to put in my budget, but regardless of the amount, it is something that it HAS to be paid anyway, so it goes on automatic as well.

    :-)

  29. luvleftovers says:

    I used to hate going over my finances. I don’t anymore. Most of my bills are automatic, so I just have to confirm that they’ve gone through. Ever since I started to get more frugal, I go over them about once a week, with a monthly review.

    It worked out great as I lost my job the end of January and now I know how long I can live on UI and my savings. It’s a little depressing now that my savings are edging down instead of up, BUT, at least I HAVE the savings to live on. It’s giving me a lot of piece of mind.

  30. Thanks for sharing this routine.

    One of your last points is tops on my list– communicating with your spouse. This is a key to successful personal finance AND successful marriage!

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