How to Conduct a Month End Money Review

It’s already the beginning of a new month, and it’s hard to believe how fast this year is going despite everything going on in the world! If you’re like me, the promise of a new month (and new quarter!) is so refreshing. I love reflecting on the last month and setting goals and intentions for the month ahead.

At the end of every month I do two things:

1) write out things I was grateful for that happened over the course of the month

2) do a end of month money review

What is a month end money review?

It’s essentially a review of your finances for the month, including all income you earned and expenses you had. It’s not a difficult process, but it does take some time. Once you have the process down though, you should be able to repeat each month with less time and effort. Also - the pay off is worth it! For me, once I’ve seen what we’ve spent our money on and how close we were to our goals I can make adjustments for the next month.

Here’s how to conduct a month end money review:

1) Go through your transactions for the month and make sure everything is accounted for.

You can do this process manually (by going through each of your bank/credit card statements!) or review on a software such as Mint (which is what we use) One note of advice: Make sure if your accounts are linked up in Mint (or similar software!) that you check to make sure they are ACTUALLY CONNECTED! Unfortunately I learned this lesson the hard way this month as one of our lesser used credit cards hadn’t been syncing since April. Whoops!

2) Once you’ve double checked nothing is missing, tally up the expenditures for each spending category.

Examples include: dining out, groceries, alcohol and bars, shopping, etc. If you’re using a software like Mint, the categories should automatically fill, however, you will need to double check that your transactions are categorized correctly. For example, a lot of my husband’s fantasy football expenditures show up as business expenses for me, which is obviously not accurate!

3) Take a look at and tally up your take home pay for the month.

This should be your net income, aka the money you have in your account after your employer takes out all taxes and deductions. Don’t forget any side hustles or other sources of income you may have!

4) Subtract all of your fixed expenses from your income.

This includes your mortgage/rent, any bills that are the same amount each month or are always taken out each month (such as your energy bill) and any credit card/loan payments you make (such as student loan or car payments)

5) Start subtracting your discretionary spending categories from your the amount you had left in #4.

Make sure that if there is an expenditure that didn’t fit into a certain category that it gets labeled miscellaneous and is counted toward your total spending for the month.

6) Once completed with #5, notice if you came up in the black (surplus!) or in the red (shortage!)

If you’re in the red, then it’s time to evaluate which categories you overspent on and where you need to reign it in for the next month. If you’re in the black, hooray! Give yourself a pat on the back for not spending more than you earned for the month.

7) With this awareness, make a plan for the next month.

Now that you’ve seen how much you earned, how much you spent, and what you spent your money on, it’s time to make a plan for the next month! Are there areas you need to cut back on? Are there any expenses you can cut out completely? Do you need to hustle a bit more this next month in order to make enough money to cover your expenses? Remember: “a goal without a plan is just a wish”

Although you can certainly write this all out, I love using both Mint to track and categorize expenses and Google Sheets to enter in all of our date (income, fixed expenses, variable expenses, totals, etc.) By using a spreadsheet software such as Microsoft Excel or Google Sheets you can compute the calculations right inside the spreadsheet. Another bonus is after a few months you can compute averages for different spending categories and then update your budget to more accurately reflect how and where you are spending your money.

And that my friends is how to conduct a month end money review! If you’re still feeling lost on how to start this process, send an email to info@katieoelker.com with the subject line “help please!” and I’ll be happy to answer any questions you have or see how I may be able to help you get started!

Until next time….

Cheers to your abundance!

Katie O.

July 15th deadline - Taxes and Roth IRA contributions due!

Well hey there! It’s been awhile, eh? (cue my inner Minnesotan!) The last two posts I penned were about tips for times of financial unease and working with young kids at home, both of which are still relevant. It’s crazy to think how many months this pandemic has already gone on, and how many more we may be in for. Either way, I hope you’re hanging in there!

Today’s post is all about some practical financial info that you may (or may not!) already know. When the pandemic started, the U.S. government extended the tax deadline to July 15th. My husband and I actually filed ours early (in late February) as we were headed out of town mid-March and wanted them to be done beforehand. It felt great to have them done earlier this year! When I used to do my own I always waited until the last minute and it was so.dang.stressfull!

That being said, this is the first year I am paying quarterly taxes for my business which is exciting (as it means I’m actually making enough money to have to pay estimated taxes - win!) I accidentally forgot to send in my March quarterly however, so I sent them both in at the end of June. If you’re a procrastinator like me - I get it! This is my friendly reminder to you however to just get those puppies done and filed before midnight Wednesday!

Also - on an equally as important note, July 15th is also the LAST DAY to contribute to your Roth IRA for 2019. If you have a Roth IRA already set up and you have extra money lying around in your savings that you feel comfortable parting with, consider maxing out that Roth.

And if you don’t have a Roth IRA, it’s not too late! You can setup one ASAP at a place like Fidelity or Vanguard and contribute for 2019.

Here’s a little more info on Roth IRAs:

Q: What is a Roth IRA?

A: A Roth IRA is an investment vehicle which allows you to put in money AFTER TAX. (Essentially you fund it from your checking or savings account.)

Q: Where can I setup a Roth?

A: You an set one up online at places like Fidelity, Vanguard, Betterment, Ally, and Charles Schwab, to name a few. OR you can also work with a local Broker-Dealer near you to set up a fund. You’ll likely save fees by setting up and managing your own Roth, but either way my best advice is to understand what fees you are paying when it comes to your account management!

Q: What can I invest in?

A: While the Roth is the vehicle you open, you still need to choose what you want to invest in within your Roth. Some options include stocks, bonds, mutual funds, ETFs (exchange traded funds), as well as money market funds. My favorite investments are Index Funds, which are funds that track the market regardless of how the market is doing and have extremely low fees. The market almost always out performs actively managed funds (which are more expensive) - another huge win!

Q: How much money can I put in?

A: The limit for 2019 is $6k (or $7k if you’re 50 and over). If you make over $193,000 as a married filing jointly couple or $122,000 as a single person, however, you will be in the phase out stage. The easiest way to know how much you can put in if you’re over the income limit is to work with an accountant to determine what your Modified Adjusted Gross Income is.

Q: Can I take my money out anytime?

A: Yes - but there are stipulations. You can certainly cash out of your investments anytime, but you may have to pay a penalty (as well as taxes on gains!) if done so before 5 years of account opening. You can always take out just your contributions anytime penalty free (just not the earnings!) After 5 years of account opening you can take out gains tax and penalty-free for a few instances such as for a disability or a first time home buyer purchase. If you’ve had it open for less than 5 years there are instances when you can take out the money penalty-free, but still have to pay the taxes on earnings. Confused? I get it. Here’s a great guide to help HERE.

Alright ya’ll - that’s it for now! Hope this helps you a) get motivated and b) take action!

Until next time…cheers to your abundance!

Katie Oelker
Financial Coach and Writer

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Using a No Spend Challenge to Save Money

Oh hey there!

Hard to believe it’s already mid-August - eek! Summer sure is flying.

Last month in my membership, the Kick Down Debt Club, I started a challenge to spend less and save more in order to keep our budgets on track through month end. It was so much fun (in a finance nerdy kind of way!)

Do you have a tendency to overspend or just need a way to jump start some savings? If so, I highly suggest adopting a No Spend Challenge of your own!

I also recorded a podcast outlining how to do this (which you can check out HERE!) but here's the written guidelines of how to conduct your own No Spend Challenge:

Step 1) Determine how long your challenge will run. I suggest 5-7 days max so you don’t get unmotivated as the time goes on, and also love using this type of challenge either at the beginning of the month to kick it off on the right foot, or at the end of the month to end on a strong note!

Step 2) Set a target for how many days you want to have be “no spend” days. “No spend” means days that are not including already planned for and necessary spending such as grocery trips, gas, bills etc.) I wouldn’t try to do the entire 5 or 7 days (depending on how long you decided to run the challenge for), but aim for a few no spend days out of that stretch.

Step 3) Get some accountability. Enlist your partner to join you in the challenge, tell a friend or coworker about it, or join us in the Kick Down Debt Club!

Step 4) Use a "Can Wait" list and write down all the things you are tempted to buy during this time (or add them to your virtual shopping cart!) Studies show that if you can postpone a purchase 24-48 hours, it’s more likely that you will convince yourself out of purchasing it all together.

Step 5) Celebrate in a non-monetary way when completed! It’s OK if you didn’t meet all the no spend days that you were hoping to. The point is to make you more mindful of your spending and create better habits moving forward. Indulge in a long bath, bake some cookies, or treat yourself in some other way that doesn’t cost money.

Step 6) Plan your next No Spend Challenge! Again, I love using these at the beginning or end of month. The next challenge we are doing is a No Spend Food challenge (aka limiting how much we get takeout/dine out!) If you’re interested in joining for the next one, check out the Club HERE!

Will you adopt your own No Spend Challenge? If so, leave a comment below and let me know! I love hearing from you.

Until next time…

Cheers to your abundance!

Katie O.

How to Conduct a 5 Minute Money Date

It’s Money Date Monday!

What the heck is a money date Monday? It’s the day/time you check in with your money, duh! ;) Kind of like those fun things you do with your friends or partner, but this time it involves #adulting.

Looking at your money does not have to be stressful or complicated. In fact, the more you do it, the easier it gets and less scary it seems!

Why review your money?

Easy. Because when you know what you’re spending money on throughout the month you are more likely to stick to your financial goals. If you have no idea where your money is going, it’s going to be really hard to pay off debt or increase your savings.

Why does it need to be a money “date”?

Money dates are important because if you don’t have a time scheduled to review your finances, it’s pretty likely something else will come up. If you have kids or a busy work life, you know that if you don’t schedule something, it doesn’t get done! Am I right?!

I like to use Mondays to review our family’s finances and am going to break the process down. It’s so easy in fact that you can do it within 5 minutes too! (and no, it doesn’t have to be a Monday but I just like the ring of it ha!)

Here goes!!!

How to Conduct a 5 Minute Money Date

1) Step one: login to Mint (or whatever financial tracking app you use)

Now if you manually enter all your numbers into a spreadsheet or even use pen and paper, then get out whatever system it is that you use. I love Mint personally because it automatically pulls from all our bank/credit card accounts and categorizes them, so I just have to log in to make sure the categorizations are correct and change the ones that are not.

2) Step two: review your balances

I like to start my money date by taking a peek at what our Bank Statement balances are on all checking, savings, and credit card accounts. This gives me a good overview of what we have going on in our accounts and if something looks off from this macro standpoint I can investigate from there.

3) Step three: review your transactions

I look through each transaction that occurred over the course of the past week to make sure that a) they are categorized correctly and b) there aren’t any strange transactions that I can’t place on there. You wouldn’t believe the number of times I’ve caught fraud on our account when conducing our money date! And then the transactions that are not categorized correctly I just quickly change.

4) Step four: check out your budget progress

This is one of the main reasons why I love Mint so much: they have the progress bars for each budget category that you have set. So when I look at these I can see how much we’ve spent for each category and how close we are to tapping out that month’s budgeted amount.

Now the point of budgeting is not to be super strict and obsess over every little dollar (well not in my world at least!). The point is to have an idea of what you’re spending your money on and use that knowledge to influence future decisions. For example, if I see we are getting close to tapping out our dining out budget but it’s only 3/4 through the month, I know we need to reign it in for the last portion of the month. Or if we haven’t spent much on other budgeted areas I will take that into account and assign those dollars to the category we are close to tapping out on.

5) Step five: pay off any revolving debt balances

So this is definitely an optional step depending on how you use credit (if you use it at all!) If you’ve read my travel hacking article (which you can check out HERE) I go into detail on how my hubby and I use credit cards to fund our love for travel. Now this method won’t work for everyone (especially if you have trouble overspending and are not able to pay off your balances in full every month!) but is super handy for those who want to rack up some rewards for the money they are going to spend anyway.

You can now set your credit cards to automatically pay in full before interest hits, however, I still like to pay ours down manually. This helps me feel more in control and assured that they are paid off and we will not be stuck with any interest. I typically complete step 5 every other week to align with my hubby’s paychecks. Again, this step is optional but I wanted to include it for those who use credit and like the idea of paying them off manually.

Alright - that’s it! That is how to conduct a 5 minute money date.

If you have questions on this method, feel free to leave a comment or email me at info@katieoelker.com. I’m happy to help in any way that I can.

What about you? Do you have a money date? How does yours work? Leave a comment below and let me know. I love hearing from you!

Until next time…

cheers to your abundance!

Katie O.

How to Talk to your Partner About Money

Ahhh money. Let’s be honest, no one really enjoys talking about it. Especially not with another person. And even more so when that other person happens to be the person you share your finances with. Can I get an amen?!

Unfortunately money is the #1 reason why couples argue, and eventually end up splitting. Money was created by mankind to facilitate the trading of goods and services, but it has become much more than that. Each of us has our own unique money “story”, how we grew up with money and how we really feel about the stuff. Our attitude towards money is partly based on how our parents, grandparents and other influential people viewed and used money. You can see why when two people get together and share money, there can be differences! If you and your partner on not on the same page about your finances, it can cause stress on your relationship, and no one wants that!

Today I want to give you a few tips on how to talk to your partner about money to make it a little easier on yourselves.

Let’s jump in!

How to Talk to your Partner about Money:

1) Schedule time for it.

Plan a certain day and time of the week where you will sit down and discuss your finances and what’s going on. You can review your transactions together, look at your balances and bills, discuss expenditures coming up, or even just talk about how you are feeling about your current financial situation and brainstorm steps to improve it.

2) Make this time fun!

Pour yourself a glass of wine or beer, do it while taking a nice walk outside, turn on some music you both enjoy. Talking about finances does not have to be all doom and gloom. Find ways to lighten the mood.

3) Use “I” statements.

Instead of pointing your finger at your partner and their downfalls, use statements such as “I feel ______ when you do _____” to take the blame off. Instead of asking or demanding that they change their behaviors, state it as “I would like _______ to happen” The goal is to have an open and honest conversation about how you are both feeling, without offending the other or making them feel like they need to defend themselves.

4) Discuss your values, goals and priorities.

What do you really want out of life? What are the things you like to spend your money on? If you had unlimited money, how would you spend it? These questions can help guide you.

5) Find commonalities and make compromises.

Review those values, goals and priorities and determine what you both have in common. What are the areas you agree with? Disagree with? Then, outline a few that you do agree on and how you will send your money towards those as well as a few that you may individually value and how you will make that work. It may take some lengthy discussion and compromise, but when each partner is happy within the relationship then the relationship tends to run smoother overall!

6) Talk about the long game.

Speaking of goals, what does the long game look like for your family? Do you want to eventually own a home on a lake? (ahem, that’s us!) Try and retire a certain number of years early? Is it important that you take your family on a vacation each year (or save up for a special trip every certain number of years) or that the two of you get away as a couple? What things do you want to do that require some planning in advance?

7) Don’t sacrifice the short term.

It can be easy to get caught up in the fun of future planning. However, I hate to see couples suffer in the short term because of their long term goals. I truly do believe that life is meant to be lived well and enjoyed in the here and now. Because let’s face it, not a single one of us knows when our time will be up! Don’t forgo your happiness today for a future that is not promised. On the flip side, don’t sabotage your long term success in the short term by not fully understanding the bigger picture and how you will get there.

Alright you guys, that is how to talk to your partner about money in a nutshell! Which of these have you tried before? Which will you think about trying? Leave me a comment and let me know! I love hearing from you.

Until next time…cheers to your abundance!

Katie O.

P.S. - If you’re feeling discouraged about how you and your partner currently handle your finances, book a free consult call to see if I can help you get on the same path. The best part? It’s free! Click here to book.