Keeping track of your money can be a chore that you don’t often want to think about. I know I dread the endless letters in my mailbox, the stack of unfiled papers on my desk, the bills that need paying, the bank accounts that should be checked, and the budgeting and investment spreadsheets I should be updating.
Honestly, keeping track of your money properly is a lot of work so you’ll need every advantage you can possibly get to make it as painless as possible. Here are 6 tips to get you moving in the right direction.
1) Automate Everything You Can
Many aspects of your finances can be automated these days and you want to take advantage of that as much as possible to minimize the amount of time you are spending doing busy work. Having things automated also means that there are fewer things to worry about floating around in your mind and distracting you which ultimately causes things to fall between the cracks. That’s when payments get missed, cheques start bouncing, and the late fees start adding up which can be very expensive indeed.
2) Organize Payments Around Payroll Deposits
Keeping track of how much money you really have works a lot better when your payments are deducted from your account soon after the money is deposited. That way it doesn’t look like you have a ton of money sitting there ready to spend when really you have a large payment due in a few days that will eat up most of it.
Try calling up all the companies that deduct payments automatically from your account and ask them to change the billing or payment dates so that they come out in a pattern that is in sync with when your pay cheque gets deposited.
It’s also a good idea to spread out your monthly payments so they are split evenly between your pay periods resulting in the amount coming out of each pay for bills being about the same. For instance, you could set your mortgage to come out around the first of the month and your car payment to come out near the middle of the month so they balance each other out.
3) Take Advantage Of Online Banking And Mobile Banking
It seems everyone banks online these days, but it can never be stressed enough how much it simplifies your life. I wouldn’t step foot in a branch to speak to a teller for my personal banking more than once every year or two these days because everything I routinely do is handled online.
Bills can be paid instantly or scheduled for the future, statements and balances can be quickly reviewed, money can be transferred between accounts or sent to others in a flash, new accounts can be opened, cheques can be ordered, and addresses and account information can be updated. All it takes is a few clicks to do anything!
Mobile banking is a newer part of the equation and people are still a little wary of using it but I think it’s a great advancement for the banking industry. I’ve used it myself on many occasions and you can do pretty much anything you can do with online banking anytime and anywhere using your smartphone.
One thing to watch out for soon is mobile cheque cashing. It's done by taking a picture of a cheque you want to deposit using the camera on your smartphone and having it instantly show up in your account. One bank that I know of in Canada is already doing this and others are sure to follow suit soon.
4) Set Up Calendar Reminders
One thing that has really helped me keep better tabs on my money is setting up calendar reminders twice a month to go and review my accounts and finances. I set it to email me, text me, and pop up on my web calendar at different times so I’m sure not to forget. Once the alarm bells start going off, I go in and get everything done all at once including:
- Checking account balances.
- Verifying transactions for accuracy.
- Thinking of upcoming bills and automatic withdrawals so I can make sure sufficient funds are present.
- Paying any manual bills that aren’t automated or schedule future payments for a time when I know sufficient funds will be in my account so I don’t have to go back and make the payment later.
- Checking credit card balances and rewards balances as well as paying them off.
- Moving funds between chequing and savings accounts to maximize interest earned.
5) Consolidate Your Accounts
I could probably use a lesson on this one myself because I tend to open a lot of accounts based on who is offering the best deal or best rewards program at the moment. This can lead to a big financial headache keeping track of them all.
There surely are legitimate reasons for having multiple accounts across institutions, but it definitely makes sense to minimize redundancy as much as possible. Again, the fewer balls you have in the air, the easier it will be to keep track of things and avoid unnecessary fees. Take a hard look at all the accounts you have and close down those ones that you really don’t need and see what accounts you can bring under one roof for easier management.
One word of caution: be careful with credit accounts like credit cards because they do affect your credit score. The average age of your accounts is taken into consideration when giving you a score so, if you have a really old account that isn’t costing you anything, you may want to keep it open. Just be sure to use it a couple of times a year to keep it active and having it will actually strengthen your credit score.
Related: The Best Credit Cards In Canada
6) Make Use Of Personal Finance Software
There is lots of software out there that helps you keep track of your money in a very efficient way. I personally haven’t used much personal finance software myself, but I have read many good things about it from other bloggers.
Here is a list of popular personal finance software available to Canadians that I know of:
- You Need A Budget
Many banks are starting to incorporate third party personal finance software into their online banking platforms and rebranding it as their own as well. I know Yodlee is a popular choice for banks and at least one Canadian bank has taken this approach so check your bank to see if they already offer something.
Does This Sound Like You?
Letting your finances slip out of control is something we all are guilty of from time to time. Does the girl in this video sound like you? If so, it might be time to change course and start keeping closer tabs on your finances.
TD Bank sponsored this post and provided the video, but the content of the article was 100% researched and written by me.