If you adopt any on money habit at any point ever in your life, I pray that it is a monthly review. Reviewing your spending at the end of each month is the single best way to get familiar with how much your lifestyle really costs, what your biggest costs are, and what exactly you’re spending on.
Armed with that information, you can then start to make changes in your financial life, like cutting back in areas you’re overspending in or cutting out categories you don’t give one single fuck about. But it all starts with reviewing your spending.
Of course, reviews are nothing if you don’t know what you’re looking for. Simply staring at all the money you spent last month might do more to stress you out than help you if you have no guidance. What should you be looking for? How do you assess your money?
Here are three money questions to ask yourself each month that will help you understand your spending and gain insight into how you use money.
Three Money Questions
What area did I spend the most in?
We all have at least one area that is our biggest money suck. For most people, it’s either housing, food, or transportation. Your biggest spending area could easily be a need. You could be spending $1,500 on rent each month because housing costs are truly insane in most places in the US, not because you’re bad at money.
Find your biggest spending area and categorize it as a need or a want. Assess if there’s wiggle room here- can you negotiate with your landlord at all? If it’s something like restaurants, can you cut back from a few times a week to a few times a month?
You can create financial change in your life in many ways, but first you need to know what you’re working with.
What stressed me out the most about my money?
Money and stress- for most Americans, the two go hand in hand. I’ve personally dealt with a lot of financial anxiety, and 43% of Millennials say stress about money prevents them from being totally healthy.
A good way to start fighting back against that financial stress is to break it down into pieces. Almost everything difficult gets easier if you start with just a piece of it, instead of tackling the whole thing.
Are you stressed because your income is too low for you to feel confident about paying all your bills each month? Do you make good money but have no idea how to start investing? Are your student loans going to put you in an early grave?
Identify the biggest source of stress in your financial life. Once you know what it is, you can come up with a plan to change it little by little. Say you’re stressed about being low income- maybe you can do some market research and ask for a raise. Or you can pick up a lower stress side hustle each weekend to compliment your full time job.
What am I proud of myself for doing?
Money is all too often talked about in voices tinged with doom and gloom. You can look at your accounts and feel stressed or inadequate. But most likely, there is something that you did this month that was a financial win.
Financial wins can be many things. They can be raising your rates as a freelancer. They can be negotiating with your internet provider for a cheaper rate. An easy to get financial win is to organize your finances on a budget spreadsheet and spending tracker.
Find a win in last month and congratulate yourself for it! As you’re getting set up for a new month, lean into your wins. Can you do more of them? Can you expand your awesomeness to another part of your finances? Remember that you are a powerful, financial conquerer. With the right information and time, you can do anything!
Asking yourself these three money questions each month will help you get more comfortable around money as well as help improve your finances overall. Imagine sitting down and reviewing your spending and asking yourself these questions for a whole year. What in your life could change?