Don’t let the anxiety of the end/beginning of the month get to you. Creating a budget routine is key to reduce the anxiety around your finances. I like to use the “living on last month’s income” method – you can read more about it here – and for me the end of the month is the best time to make sure everything is accounted for. Here is my top three things to do during my budget routine at the end of the month:
1. Check that your account balance is ready for next month’s bills
By the last day of the month you will have received all of your current month’s income and it is time to transfer the balances to their respective accounts according to your budget. Not having automatic transfers forces me to stop and look at my accounts and budget – if automatic transfers work for you, great, go for it and don’t think twice! For me, one of the most important parts of creating a budget is to find a system that works for you.
2. Check that all your planned expenses for the current month posted
Every once in a while, after doing my balance transfers one of my accounts has a significant higher balance than what’s on my budget, when this happens, I pull up the last 30 days and try to identify any bills that didn’t post. There is usually a couple things that can cause that: the issuer has one of those 31 day billing cycles, which inevitably will post the bill on the 1st or the 2nd of the next month, even though it is technically a bill from the current one. Another issue is if the autopay failed to post for some reason, usually billers will send you reminders about it, but who doesn’t get 107 emails per day and ignores about 93.4% of them? I do…
3. Transfer any surplus to your savings - or transfer money from your savings if you have a shortage for the next month
And then sometimes that is a more rewarding type of difference in your account, maybe you received a refund of some sort and yay! “free” money. Not really free, more like unplanned, but I will take an unplanned positive balance than an extra expense any day. I usually have two main destinations for those refunds, they usually go towards my savings, or I buy something that has been sitting on my wishlist for a while, without the buyer’s remorse. If you are creating an emergency savings, I don’t recommend indulging in a wishlist purchase, that extra money can help you achieve the emergency savings goal faster and once you are there you will be able to become a little more flexible with your spending. More often than not though, there is a shortage in your budget, unexpected expenses pop-up all the time, a birthday here, a tire there, life is made of unexpected expenses if you ask me and living on last month’s income and having a budget can help you navigate those with a little less stress attached to it.
Marina Boeira
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