Essential Financial Tasks

There are several essential financial tasks that help keep your financial house in good order. There are other important financial to-dos, but these are the ones that absolutely must get done if you want to stay out of spending trouble.

These tasks involve some math. If you’re not good at math, suffer through the first couple of times. I promise these essential financial tasks get easier the more you do them.

Reconciling Key Accounts

I recommend reconciling key accounts as soon as they become available, or at the very most a day or two after. By key accounts I mean the ones where most of your transactions happen. More than likely those are your checking and credit card accounts.

Make sure you’re signed up for electronic access. You’ll be able to reconcile these key account statements days sooner than waiting to get them through the mail.

If you’ve got multiple accounts, think about consolidation to make things less complicated. You need to keep track of all your money, wherever it might be, but pay special attention to these heavily used accounts, in particular checking accounts with debit cards attached.

It’s easy to do your bank a favor and accidently spend more money than you have in the account since transactions clear very quickly. This can lead to a mini financial disaster, including late fees, penalties, and interest charged. Banks make a lot of money on these types of fees, so don’t expect much empathy if you mess up.

Reconciliation simply means making sure their numbers add up to your numbers. Apps can simplify the reconciliation process by automating it somewhat, but you still need to track down every penny if things don’t add up.

Credit card accounts are important to reconcile as soon as you get them too, even though they’re generally available a good 2 to 3 weeks prior to the statement due date. I still recommend reconciling and scheduling payments promptly. That gives you plenty of time to get together the money needed to pay off the balance owed in full. Reconciling key accounts, one of your more important essential financial tasks, makes sure your expense gathering device is up to date and accurate, as well as being the first line of defense against identity theft. Make reconciling your key statements as soon as they are available a monthly habit.

Scheduling Payments

Try and hold onto your money as long as you can. Extra money in your account has utility even if you’re not earning interest: It helps with cash flow when managing a tight budget. That’s why I’m a big fan of scheduling payments, especially if you can schedule the bill to be paid on its due date rather than the date you pay the bill. This includes credit card payments too, but only if you’re paid up in full.

If you’re still working on getting out of credit card debt, do not follow this advice. When paying down a carried balance, credit card payments should be made as soon as money becomes available, regardless of the due date. You can dramatically cut down the time it takes to get out of credit card debt by making early payments on a carried balance.

I’m not a big fan of letting a creditor (mortgage company, auto loan, student loan, credit card company) or vendor (electric company, other utilities, phone, media subscriptions) have control of your checking account. That’s often required if you want to sign up for automatic payment. This gives them the upper hand in case of a dispute since they take the money first and ask questions later.

If you want the convenience of automatic payment, do it on a credit card. Since you haven’t technically paid that vendor or creditor until you pay your credit card bill, now you’re in the driver’s seat if there is a problem. Also, credit card companies are surprisingly cooperative when disputing charges.

Check It Twice a Month

Being your own best money manager means making important decisions about money several times a year, not hundreds of times. Keep things simple, and don’t obsess over it. You do, however, need to check on things halfway through and again at the end of the month. This is one of several essential financial tasks that help you live on what’s left over.

Whatever expense gathering device you choose, I hope you take my advice and use standardized expense categories. That’ll make it easy to check your spending ceiling for each expense mid-way through and red flag any problematic categories. Check it again at the end of the month to make sure you’re good.

Year End Meeting

Near the end of the calendar year, you need to schedule an important meeting. With yourself. Take this meeting seriously. Some important decisions need to be made.

If you have one, think about inviting your significant other to the meeting, assuming you’re not planning to kick them out of the house any time soon. Maybe that loved one of yours is the spender in the family and at the root of your financial woes? More reason to invite them.

Many couples want to keep their finances separate and private, but I recommend a more open relationship when it comes to money. Why duplicate financial tasks when it can be done so much more efficiently if you do it together? That’s something you’ll want to work on.

Besides saving time and sharing financial duties, the best reason to buddy up are financial goals. It’s so much easier to achieve them when two are working as one rather than each individually. Take your wealth building to new levels!

This year end meeting is for the sole purpose of getting your spending in good order for the coming year. It’s much better to decide how to spend your money beforehand than trying to do it on the fly. You can be much more rational about the best places to spend your money here at your meeting. Make these annual meetings with yourself a habit.

Were you able to stick to your saving percentage during the past year, or did you repeatedly have trouble living on what’s left over? Decide now whether you need to lower it, can afford to raise it, or just keep it the same as last year. Know even a small increase in your savings percentage can really make a difference in your wealth building.

Once you’ve decided on your savings percentage, get to work on your budget. Review those customized expense categories you’ve created in your expense gathering device. Make it easier on yourself during the coming year by modifying, combining, or creating new categories where needed. Standardize your periodic expenses and maybe some of your variable ones too.

Be ambitious with your projections, but don’t set your sights so high as to set yourself up for failure. Once you set your savings percentage for the coming year, stick to it through thick and thin. Defend it when necessary. Never prioritize spending over saving again.

Don’t even think about skipping this important yearly meeting. It’s one of those essential financial tasks that will pay dividends next year and into the future. Don’t worry, every year’s subsequent meetings will get easier as you get better at managing and performing the required tasks.

Essential Financial Tasks

Keep the spending portion of your financial house in order by performing these essential financial tasks. After your yearend meeting, put things on autopilot. You’ve already made your important spending decisions for the year.

Summon the discipline needed to complete those monthly essential tasks and stick to the plan during the coming year. Knowing you’re making the best possible choices regarding your spending will help.