If you’re set on improving your finances this year, you’ll already know that setting those goals is only the first step. The next step is creating a long-term plan that sets you up for success, and a system that keeps you accountable to those goals.
One of the best ways to ensure you stick to your budget goals is to make sure you’re consistently building healthy financial habits and reviewing your progress. Keeping your financial goals at the forefront of your mind is key.
In this article, let’s look at the crucial habit of conducting a monthly financial review, whether you’re having a check-in with yourself or between you and a partner.
Why Is A Monthly Financial Review Important?
If you have any type of savings or financial-related goals this year, consistency is your most important weapon. It’s key to keep those goals at the forefront of your mind so that you can build healthy personal finance habits and ensure your actions meet your intentions.
An end-of-month financial review is a fantastic way to go over your monthly budget spreadsheet and track your progress, make necessary adjustments, and be transparent about your financial goals.
Our monthly budget spreadsheet makes it simple to track your income and expenses. The expense categories and calendar give clear breakdowns of your budget. We'll even show you the ideal budget for your income so you can see how you compare.
Colorful charts and graphs will help you visualize your spending and goals. Download this template for Excel or Google Sheets to finally get a handle on your monthly spending and achieve your financial goals!
Some of the major things a monthly budget review can do for you include:
Enables You To Monitor Your Progress
Monthly financial reviews act as checkpoints to assess how close you are to achieving your financial goals. They provide an opportunity to celebrate successes or recalibrate your budgeting strategies if you're falling short.
Makes You Accountable
These reviews create a space for open communication about your financial expectations and realities. Whether it's a personal reflection or a discussion with a partner, this process can help to foster a sense of responsibility toward your financial commitments and ultimately holds you accountable.
Consistency and Adaptability
Setting a regular schedule for these reviews encourages a consistent approach to managing your finances while creating space to make regular adjustments in response to changes in your circumstances month-by-month.
Monthly Budget Review: What To Look At
Here are a few great aspects to cover in your end-of-month financial review in order to keep you on track with your goals.
1. Audit Your Current Systems
Start by taking an overview of your current systems and how they are working. For example, that could mean reviewing:
Your current bank accounts: Is there any need to merge or close separate accounts? Are your savings accounts yielding the maximum amount of interest? Are there any other accounts you need to consider opening?
Automated processes: If you have automated some parts of your budget, such as expenses and savings, is this still working efficiently? Have you identified any other expenses to add to this process, or do you need to increase the amount going into your savings?
Access: Use your monthly financial check-in to make sure you have the necessary access to all joint or individual accounts and that this access is secure.
By taking a quick overview of your current systems and how they are working, you can begin to identify elements that you might want to consider changing and make the necessary adjustments - which we’ll cover in a few sections.
2. Look at Your Monthly Spending Report
Another important part of your budget to review each month is your spending report. If you are already using a budget template to track your spending, it should be fairly straightforward to identify your spending vs your income.
You should also compare your actual monthly spending against what you put down in your budget, and identify specific categories where you have overspent or underspent each month. Is there a clear pattern here that you need to address?
Look for areas where money might be leaking unnecessarily. This could be subscriptions you no longer use, habitual spending, or fees that can be avoided.
Be honest with yourself, and try to avoid judgment if you are conducting your review with a partner. Acknowledge any shifts in priorities or circumstances since the last review and consider modifying your budget to reflect these changes if they’re likely to be long-term expenses.
3. Assess Your Savings Goals
Use your monthly review to also assess your savings goals, and your progress towards reaching them.
If you have been implementing a strict budget, you should have a clear idea of when you’ll reach your savings goal. However, you may find that you can shift your savings to a better High-Yield Savings Account (HYSA) to better align with your goals.
You might also find that you’re being more frugal than you expected each month, and have more cash available to send directly to your savings pot than you first thought.
If saving is a priority in your budgeting strategy, adjust your goals and the amount you are putting away to keep it in line with your spending and overall budget.
4. Go Over Any New Income and Expenses
Use your monthly check-in to account for any changes in your income or new expenses. This might include salary raises, new recurring bills, or one-off expenses that need to be factored into your budget.
If you have a budding side hustle alongside a full-time job, you might want to track how your income from your side project grows each month and help you forecast where your income might be in 1, 6, and 12 months from now to help plan out your budgeting and savings goals more accurately.
Likewise, if you know you have an expense coming up in the near future (such as holidays, vacations, or general expenses like getting your car serviced), cover these in your financial review and make the necessary adjustments to your future budget.
5. Reassess Your Goals
Revisit and revise your financial goals as necessary each month. Life changes, and so might your financial objectives - what you thought were your financial goals at the beginning of the year may look very different 6 months in if you’ve been through dramatic life changes.
Your monthly financial review can help to guide your budget, ensuring the overall health of your personal finances doesn’t get pushed aside but adapts to you as the year goes on.
6. Make Any Necessary Adjustments
Finally, take a few minutes at the end of your end-of-month financial review to make any necessary adjustments to your budget, both short and long-term.
Your monthly check-in should give you a transparent picture of your financial situation, and what aspects of your budget are working. Likewise, you should also be able to identify key points that aren’t working, and what adjustments you need to make to improve your budget for the next month.
Stay on Track to Achieve Your Goals
A monthly financial review is a powerful tool in maintaining your financial health and keeping you on track throughout the year.
Find a budget template that works for you, and set aside a meeting (with yourself or with your partner) for 45 minutes to an hour at the end of each month to assess your goals, celebrate your wins, and ultimately keep you accountable for achieving your financial goals this year.
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