The Correlation Between Finances and Self-Improvement + Weekly Money Routine

Disclaimer: I am not a financial expert in any way, I have just developed financial habits that I have learned through the books that I’ve read, the YouTube videos that I’ve watched, and also some of the advice that I’ve received from financial advisers at my bank. You can pick and choose what works best for you, but further specific financial advice should be found elsewhere and from experts.

When we think about self-improvement topics such as personal development, productivity, and lifestyle, we think about techniques with time management, organisation, waking up early, developing habits… but one topic that does get overlooked is when it comes to managing our finances.

Because when you think about it, managing our finances correlate to all these areas in the following ways:

• Personal Development – personal development is all about improving ourselves. When we improve ourselves, we’re able to formulate a better lifestyle and a better sense of self-awareness. What will happen if we don’t manage our finances effectively and lack self-awareness with it? A common sense answer would be that it would cause stress, which in turn would affect our lifestyle.
• Productivity – being productive is more than just managing our time making sure we get effective work done. It’s also about making decisions, and decisions require us to manage our time. We may not have noticed, but we do make daily decisions about money. Are we going to spend money today? How much will we be spending? Should I not go here to save money? And so on. When you think about it, whenever we spend just a fraction of time thinking about our money decisions, it’s valuable time wasted that could’ve been used for something else.
• Lifestyle – when it comes to our lifestyle, we may immediately think about the importance of eating healthy, exercising regularly, and practicing self-care. We also may think about how to take care of our our mental health and our wellbeing. So what about our financial wellbeing? If we’re not managing our finances regularly, what would happen to our lifestyle?

That’s why this blog post is all about adding another task into our routines to make us more productive, improve our lifestyle, and enhance our personal development… through managing our finances.

Managing Our Finances like a Self-Care Routine

This may not be a new financial tip, but it is common sense that being aware on how much money is being spent and how much income is coming in is important. Just like with productivity where we need to be more mindful on where our time goes, we also need to be mindful on where our money goes.

To be honest, I know for myself that constantly keeping track of my finances and my spending is a bit of a hassle. And because it becomes a hassle sometimes, there are just times when we can’t be bothered doing it.

I have read lots of books on personal finance, and watched a lot of YouTube videos on the topic as well. I even went to my bank and asked for financial advice from the ones who were doing my yearly finance check. They all mention one thing in common:

Regularly track where your money is going.

Now, based on the tips that have been provided from all the sources above, I have been able to develop weekly financial habits that make managing money a lot less of a hassle. In turn, this correlates with our personal development as we are able to become more self-aware on what we are spending, and self-awareness is one huge part of personal development.

As always in this blog, you can always pick and choose what works best for you.

WEEKLY/FORNIGHTLY ROUTINE

One of the reasons why it may be beneficial to do this weekly is because your finances is something that you want to always be aware of, to make sure that you are on track, and that you’re not spending more money than you earn. It’s also a good opportunity to budget what you are going to spend for the week so that you can avoid that as well. Remember how I mentioned earlier on how those little daily decisions wasted valuable time? Undertaking a routine at the beginning of the week to already be aware on where our money is going, will save us time in making those small daily decisions.

It doesn’t have to take that long to do a short finance session every week. For me, it takes maximum 30 minutes to do this. If that still seems like a long time, just think about how much time you’ll save in the long run. Imagine the time that it will end up taking just by going through weeks, or even months of spending. It’s so much easier just to track it weekly.

Or you can just tracking it every fortnight, if weekly seems like too much to do at this point, as long as it is done regularly and consistently, so you save tons of time in the long run, and save yourself from a lot of stress.

If you’ve read my blog post on time management, then you would have seen that I’ve categorised the tips based on pre-planning, planning, and the doing. It’s going to be the same with the finances.

PRE-PLANNING

First, before we start outlining any sort of budget or spending plan, we need to first become aware of where our money is actually going.

You may have heard some finance tips to be conscious of your spending, and know where it is all going. You may not even know that you have hidden expenses, just simply because you have forgotten about it.

So before doing any spending plan, let’s look at the following method:

The Cutting Down Method

The cutting down method is a technique to become more aware on where our money is going, and helps us to revise our spending to make sure that we don’t have any surprise costs.

This is how the method works…

We simply calculate how much we spent over the last month on any subscriptions. This can go from music subscriptions, to Netflix, or to the gym.

Then, after you have asked yourself whether or not you actually use it, cancel the ones that you hardly ever use. Maybe, if you don’t want to cancel it completely, see if there is another plan that suits your budget, and how much you actually use it instead. For example, if you only go to the gym once a week, then it may be worth getting a one-off pass instead of just getting an entire gym membership.

The cutting down method can be helpful for the following reasons:

1. You’re more conscious on whether you’re overpaying for anything.
2. We’re more conscious of our spending.
3. We actually receive more value in what we’re paying for.

Have you ever spent your time randomly worrying about the subscriptions that you’re paying for, and then get stressed out a bit knowing that you don’t really use them?

This is what the cut-down method is all about. We cut down those very subscriptions that we don’t really use. It’s like cutting down junk food from our diet, or negative content from our mind. What will happen when we cut those things down? We feel much better, and it’s the same results for our finances.

Prioritise your spending. Know your non-negotiable spending

The time management tip was all about having our goals and deadlines clarified, and put them in order of importance. Same with our finances, except it’s all about what we are spending.

We prioritise what we must set aside our money for, such as rent, utilities, phone plan, etc. And then arrange the rest in order of importance accordingly. Because, when you think about it, in order to know how to manage our money, we need to know first what we need to allocate our money to first, right?

One way to decide what is of priority when it comes to our spending is considering the consequences. Think about what spending priority has the most severe consequences if we don’t prioritize it in our spending plan.

For example, not including our rent as part of our spending plan, would obviously cause us issues, and when trying to attain future places for rent, it may be difficult as the fact that we don’t pay rent on time is on our record.

Create a Not-To-Spend List

In the time management blog post, it was creating a not-to-do list which was filled with tasks that are just plain distracting and we’re better off not doing them at all. With our finances, this is creating a not-spending-plan which lists all the things that are just a plain waste of money, and we’re better off not even including this on our spending plan.

For example, not spending money on desserts may be part of the not-to-spend list.

PLANNING

Now that we have become more aware on what we have always been spending, now we can go through the actual weekly (or fortnightly) routine to become more conscious and aware of our spending.

Step 1 – Note Down the Week’s Expenses

This one is not a new one. You may have heard this one from any person who gave finance tips… list down what you have actually spent in that week.

Honestly, when you think about it, this is the first step to becoming more aware and conscious of our spending. The more times we do this, we’re going to be able to identify a pattern in our spending.

For example, we may notice that we spend money regularly on food, or we’re spending money on the gym that we hardly ever go to.

Sometimes, it gets a bit intimidating and stressful just looking at our spending, but it would probably be a lot harder if we let it snowball and then we end up needing to look back at months of spending. Obviously that would cause more stress in the long run, and wastes more time.

2) Note Down Deductions for Work

This will make life so much easier for when the time comes to do taxes.

I remember the first time that I had to do my own taxes, it was such a pain finding months of receipts, and look back to months of spending, and making sure that they qualify as deductions that I can put down.

That’s why next time, I ended up keeping track of every receipt, and tracked everything that I spent that was related to my job. It saved so much of the hassle to find receipts for the whole year, and so much stress as well.

Keeping track of any deductions, any spending that is related to our job can be completed in multiple ways. It can be as simple as writing it down on the notes app of our phone, and there are some apps that would allow you to put photos of receipts so it’s right there ready to go.

3) Note Down the Income Being Paid

This is regardless on whether your job is full time, part-time, or casual. It doesn’t matter whether your income is fixed or it varies depending on how many times a week you work. It’s a good idea to keep track of our income just as much as we would track our expenses.

The reason for this is that we want to get into our week, knowing how much money we are able to spend.. Because when you think about it, the only way to create a budget/spending plan is to first know how much money we are earning.

Also, if you don’t receive payments through a paycheck, and get payments into your bank account instead, it’s a good opportunity to track as early as possible, whether or not you’re being paid what you’re supposed to, and you’re getting paid on time.

4) Optimise Your Spending Plan for the Week

Conscious spending plan is pretty much a fancy word for a budget, BUT it’s still slightly different to a budget.

When we think about a budget, it seems like it’s very restrictive. However, with a conscious spending plan, the main purpose of it is to become more conscious on what we are spending, and also ensuring that we are not depriving ourselves of our money.

Laying out a conscious plan is similar to laying out our budget.

It’s similar to scheduling out our calendar when planning our week. When allocating our schedule we base them off on our priorities such as:

1. The non-negotiable priorities – these are the priorities that we must put in first in our calendar. Before we add on anything else, we must first figure out how much time these all add up. Examples include work shifts.
2. Priorities that are important, but not urgent
3. Activities that we want to do (but are not important, and not urgent)

It’s the same thing with our finances, and creating our conscious spending plan:

1. The non-negotiable costs – like with the priorities, these are what we must put first in our spending plan. Before we add on anything else, we must first figure out how much they all add up. Examples include rent and debt. They even include savings as well.
2. Spending that are important, but is not urgent – same with our priorities. We may have priorities that are really flexible to move around such as catch up with friends and running errands. In terms of finances, we think of things that are important for us to spend but it’s not urgent right away. These may include monthly subscriptions, or money for gifts… they’re important to pay for, but we can be more flexible with it on the spending plan.
3. Things that we want to spend on but it’s not that important, and not that urgent – with time, there may be some things that we want to do, and that’s it… it’s not important and it wouldn’t really add value to us. The same with our spending, there may be some things that we may want to spend on, but it’s not important and urgent at that moment. These are simply things that we want rather than need. For example, new clothes, new accessories, the newest phone. We want those things, but we don’t necessarily need them.

Now, as for turning this into a spending plan, we can split our spending into four major financial buckets (from the book, I Will Teach You To Be Rich by Ramit Sethi)

FIXED COSTS – amounts you must pay. Before you can do anything else, you’ve got to figure out how much of these add up to. These are the non-negotiable spending as mentioned above.

INVESTMENTS – (in Australia it’s the superannuation fund). Investments can also include future investments that you may undertake (including property investment & stock markets). These actually fall in the middle of non-negotiable spending and important but not urgent spending. They fall into non-negotiable spending because investing as early as possible is important, and they fall into important but not urgent spending because we can be quite flexible with how much we actually spend for this based on our income, and how much we have on our spending plan.

SAVINGS – includes short-term saving goals (e.g. birthday presents, holidays), midterm saving goals (e.g. a wedding in a few years), and larger, longer term goals (e.g. down payment of a house). These actually fall in the middle of non-negotiable spending and important but not urgent spending. They fall into non-negotiable spending because saving is really important, and they fall into important but not urgent spending because we can be quite flexible with how much we actually save for this based on our income, and how much we have for our spending plan.

GUILT FREE SPENDING MONEY – money that you can use for anything, guilt free. – These are the important but not urgent spending as mentioned above.

Don’t forget to allocate money for gifts or other things.

5) Transfer Your Savings (if it’s not already automatic)

Would highly recommend that savings are automated, just because one, we don’t resist into temptation of spending those savings if it’s in our regular account, and two, we don’t forget to do it and don’t have to stress too much about it.

But in the case that our savings are not automated, it’s a good idea to include transferring our savings into our financial routine.

DOING

No key important steps here… but it’s just implementing everything the weekly routine.

Follow your spending plan each week, making sure you spent the amount that you had planned for, and you did your part!

Key TAKEAWAY – just like with taking care of our physical health, and mental health, our financial health requires regular maintenance as well.

Book(s) this post was inspired by:

(not sponsored in any way!)

• I Will Teach You to Be Rich – Ramit Sethi

Disclaimer: If you think that any of what I had written was good, the credit actually belongs to the one whose book was the inspiration for this post. If there’s anything on here that you think is quite stupid, that’s 100% blame on me 🙂  

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