If the money in your bank account always seems to be low, you may need to review your personal finances on a more regular basis.
Keeping a close eye on your spending, saving, and investing can provide a more accurate picture of where your money is going. It could help you understand what you’re doing right and what you might want to change, and keep you on track with short- and long-term financial goals.
That doesn’t mean a full-on personal financial review every day. And some categories (spending vs. saving, for example) might require more attention than others. Here’s a breakdown of how often a review might make sense.
Ways to Review Your Personal Finances
1. Tracking Spending
When the money from your paycheck seems to slip away, it’s often because there’s no household budget in place. That means there’s no priorities set for where the money should go and no guidelines to follow.
Before putting together a budget, it can help to track what you spend money on. That includes everything from rent to groceries to prescriptions and subscriptions. To simplify the process you can use a budget and spending tracker.
Once you see how much you spend and on what, you can use that information to set up a budget. During this time you may want to keep checking your spending daily, or at least weekly, to see if your expectations were realistic and if you’re staying on target.
If you want quick feedback on your spending, you may choose to do frequent spot checks using a mobile app. If you make reconciling bank and credit card statements a monthly routine, you may have a better chance of catching any errors, possible fraud, or forgotten subscriptions.
You also may find that there are accounts you can consolidate — including credit cards and other debts — to manage your money better.
2. Reviewing the Budget
When you’re trying to get your finances under control, you might decide to check your budget every day to be sure you’re following through on the plan or if it needs adjusting. This can also help you avoid budgeting mistakes. But there may come a time when you feel as though you’ve got a solid, doable strategy, and you can cut back on how often you check your stats.
Some people do an annual budget review using information from the past year to adjust for the year ahead. They might also do a quarterly or annual review as part of a larger financial evaluation that includes checking their credit report.
Others are more comfortable with a monthly checkup so they can nimbly make changes as new expenses and life changes come up. Decide what time frame works best for you.
3. Monitoring Savings
It can be tough to stay motivated to reach a savings goal, whether it’s putting aside money for a vacation, building an emergency fund, investing for the future in an IRA, or all of the above.
Just as reviewing your spending regularly may help you stay on track, checking our savings monthly, or even weekly or daily, can reinforce the effort. It can be satisfying and rewarding to watch your bank balance increase. You might also want to look into opening a high-yield online bank account so that your savings can grow and earn even more for you.
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4. Following Investments
How often you check your investments depends on your personal preferences and what you’re comfortable with.
If your money is in an IRA or 401(k), it’s meant for the long haul — a retirement that could be decades away. A monthly, quarterly or twice-a-year check-in could be enough to spot any disturbing trends.
That regular check-in could be a good time to do some rebalancing, either by selling investments or redirecting future investments if necessary to stay on target for your goals.
5. Attending to Taxes
It’s easy to put off thinking about income taxes until it’s time to file, but this is another slice of financial planning that can benefit from a little more evaluation. And if you wait until you’re filling out tax forms, you may miss out on some savings.
Taxpayers usually have until the April 15 filing deadline to make tax-deductible contributions to a traditional IRA or 401(k) for the prior tax year.
But many tax strategies must be implemented by the end of the calendar year to have an impact on federal taxes, so November can be a good time to take a look at charitable contributions, converting money from a traditional IRA to a Roth account, making health savings account contributions, and using the money left in health savings and flexible savings accounts.
6. Evaluating Goals
When it comes to goal setting, it may help to think in terms of big goals and little goals.
Big goals might be things like sending your kids to college, buying a home, or retiring to a beach house. Smaller goals might include paying down credit card debt or taking a special vacation.
Both types of goals may require regular evaluations and financial checkups — to see if you’re on track and determine if it’s still something you want. After all, circumstances and personal priorities can change.
But the check-in schedule might be different for big goals (once or twice a year could be enough) and small goals (monthly, combined with your budget once-over, may be more appropriate).
Life events — a new job or job loss, a baby, a move — also may trigger the need to reevaluate some goals, big and small. And you might want to do a review of all your goals whenever you achieve something on your list. Rejoice and then refocus!
Wrapping It All Up
If you’re doing lots of small check-ins throughout the year, it might not seem necessary to do one big annual personal finance review.
But a yearly evaluation offers the opportunity to pull everything together — all those separate slices — to see what’s working and what isn’t. It also may be a good time to make any necessary updates to insurance policies and other documents and to gather up the paperwork you’ll need to file your taxes.
And if you do your review in November or December, you can make some financial resolutions to keep you motivated through the new year.
You also can examine if the way you’re managing your money suits your needs, or if it’s time to make some changes and perhaps update, consolidate, and automate some facets of your finances, or open new investment or banking accounts.
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SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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