Your Money Maintenance Quick Guide to Help You Reach Your 2018 Goals

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If you want your car to remain in excellent condition, you have to follow a specific maintenance schedule to keep it running smoothly. Oil changes, fluid flushes, and belt replacements can get expensive over time, but they’ll help you avoid even costlier repairs that arise from complacency and neglect.

Much like your car, creating your financial plan should include a maintenance schedule to help you stay on top of your money management and reach your financial goals sooner.

Having a set of tasks you do at specific times throughout the year may sound like more work. But it’s actually saved me time because I always know what’s going on. I don’t have to spend much time with each task and the peace of mind is worth the work.

Your money maintenance schedule for 2018

As you follow this money maintenance schedule, you’ll be able to better track where your money is coming from and where it’s going. You’ll also improve your chances of becoming more financially secure over time.

Daily

Track your spending: If you don’t know where your money is going, you’ll have a hard time controlling your financial future. You don’t necessarily need to log in to each of your online credit card and bank accounts every day, but you should consider using budgeting software that imports your transactions from all your accounts into one place.

Some budgeting applications also offer other features such as spending by category, budget maximums, and monthly reports to help make the process easier.

That way, you can check your purchases every one to three days to make sure your spending is aligned with your financial goals. Options include Mint, PocketGuard, and YNAB.

money maintenance plan

Image credit: YNAB

Check in on your cash budget: If you strictly use cash for your budgeting, it’s important to do a daily check to see how much you have left in your wallet. If you run out early, it might be a sign that you’re overspending or not getting enough cash from the bank each week.

Weekly

Update your budget: Besides keeping track of where you spend your money, you’ll also want to categorize your purchases based on your monthly budget. This can get tricky if you buy items in multiple categories in the same purchase, but it shouldn’t take too long to categorize purchases once you get the hang of it.

This is also a good opportunity to determine whether you need to adjust your budget to include necessary expenses for which you didn’t previously plan.

Review your spending: Once you’ve updated your budget, review your spending to make sure you’re on track with your monthly plans. For example, if your grocery budget is $500 and you’ve already spent $400 halfway through the month, you’ll want to cut back the rest of the month to avoid going over budget.

Create a meal plan: One way to save money on food is to create a weekly meal plan. That way you don’t end up throwing out stuff that goes bad because you never had a plan for it. And by planning in advance, you can try out new recipes rather than just getting the same ingredients over and over again.

Get cash for the next week: If you use cash for some or all of your spending, visit the bank and get all the cash you need for the coming week. This will be especially helpful if you use the cash envelope budgeting system.

Monthly

Create your monthly budget: Your budget is the most basic financial planning tool you have, and it’s also one of the most effective. Each month you should evaluate the previous month’s budget to see how you did.

For example, know where you overspent or came in under budget. Look for surprise expenses that you didn’t plan for and try to improve your forecasting. Then create one for the upcoming month.

Make tweaks as needed to keep yourself motivated but also to prioritize your financial goals. To do this:

  1. Write down each goal.
  2. Organize your goals in order of importance and urgency.
  3. If you have a partner, make sure your goals and priorities align.

Also, if you notice that you regularly go over your budget on a category, it could also be that you’re underestimating how much you need.

Evaluate your debt payoff strategy: If you’re working on paying down debt, double-check every month to make sure you’re still on track. For example, are you putting enough toward your debt each month? Can you make more room in your budget to add more extra payments toward your debt?

If you have credit cards, consider whether it’s a good idea to consolidate your credit card debt to lower your interest charges.

Revisualize: It’s important to remind yourself why you’re doing all these things. Create a vision for your financial plan and why you want to meet the goals you’ve set. How you do this is up to you.

You can create a vision board, fill out a Google Doc, or write it on a piece of paper. The important thing is that you put it in a place where you’ll see it every day. Then, take time to revisualize that motivation to keep you from losing focus.

Check your credit score: Your credit score typically gets updated once a month as creditors report your account information to the major credit bureaus.

You can check your credit score through free online credit monitoring services such as Credit Karma and Discover Credit Scorecard. If you notice your score dropping, note what’s causing the decline and work on improving it. Keep in mind that Credit Karma and some other credit monitoring services don’t provide you with a FICO credit score, which is what most major lenders use.

But the calculations these scoring models use is similar to FICO’s, so you’ll still get a good ballpark figure.

reading your credit score

Image credit: Credit Karma

Quarterly

Check your investment account statements: If you have a 401(k), individual retirement account (IRA), or any other type of investment account, check your quarterly statement to see how your investments are doing. Check the portfolio’s return over the previous quarter and determine whether you want to make any changes.

If you have a financial adviser, consult with them about ways to improve your investment strategy. Keeping an eye on how your portfolio is doing can help you determine if you’re on track with your goals.

Check your credit report: You can get a free copy of your credit report from each of the three credit bureaus every year through AnnualCreditReport.com.

Checking your credit report can help you determine if there are any errors or if someone has fraudulently opened accounts in your name. You’ll also be able to see if you have any delinquent accounts or any other issues you need to address.

Calculate your net worth: Your net worth is calculated by subtracting your liabilities from your assets. This number is a snapshot of your current financial health. It can be a wake-up call or a sign that you’re making good progress with your goals. Consider using a net worth calculator to make the process easier.

Annually

Do your taxes: Roughly three-quarters of the people who filed individual tax returns in 2017 got a tax refund, according to data from the IRS, and the average refund was $2,782. So, even though doing your taxes feels like an unnecessary evil, it can be well worth the time and stress.

Before you get your refund, decide what to do with it. Some smart ideas include:

  • Adding to your emergency fund
  • Investing in an IRA
  • Paying off debt
  • Saving for some other financial goal

Tweak your tax withholding: If you got a big tax refund, you essentially gave the government an interest-free loan. That can be a good thing if you treat it as a kind of forced savings program. But if you’d rather get bigger paychecks throughout the year, ask your payroll manager to help you change your withholding allowances so that the government withholds less money in taxes.

Set annual financial goals: Take some time each year to decide what you want to do financially in the next 12 months. It can be anything you want, but some examples include:

  • Maxing out your IRA
  • Paying off a credit card or other debt
  • Hitting a savings goal in your emergency fund
  • Saving enough for a family vacation
  • Saving enough to afford a large purchase

Shop around for car insurance: According to CarInsurance.com, you could save thousands of dollars per year just by comparing car insurance. Car insurance companies are constantly changing how they determine risk, which could mean that you’re paying more than you need to be. Take an hour or so to compare your current rate with quotes from a few other insurers to see if you’re still getting the cheapest car insurance rate possible.

Negotiate lower monthly bills: While phone and internet companies sometimes increase monthly bills for their customers, your provider might be willing to lower yours if you ask. One way to get leverage is to research competitors and find ones that offer lower prices.

You can also try this with your credit card. Some credit card issuers might be willing to lower your APR or give you some other kind of retention offer to keep you happy.

Sell off unused items: Before my wife and I moved into our house last September, we had a lot of stuff that had been collecting dust in our condo. Instead of adding everything to the moving boxes with all our essentials, we took a moment to decide what we actually needed to keep.

We created two piles: a “keep” pile and a “sell” pile. When we were done dividing the items, we put everything from the “sell” pile on Craigslist. We didn’t sell everything, but the stuff we did netted us about $200.

If you haven’t used something in the past year, it’s likely that you don’t need it. Consider selling it on Craigslist or a local online marketplace to get some extra cash to pay down debt or save for the future.

Slow and steady wins the race

While a car maintenance schedule can help keep your car from breaking down often, the fact is that the value of your car still goes down over time. The value of your financial plan, on the other hand, can grow over time as you follow these maintenance tips.

Barring any big increases in your income, it will take time to establish a solid foundation and make significant improvements in your net worth. But as you hold yourself to your goals and vision, you’ll get where you want to be before you know it.

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.