Personal finance blog “Mixed Up Money” recently published a post advocating for the setting aside of one day a month – usually the first or the last day – to do all your personal finance house-cleaning and optimization. The post was picked up and reblogged on numerous channels, and rebroadcast by internet content juggernaut Lifehacker: while I cannot imagine the effect of this on MUM’s hosting servers, I can estimate that a huge number of people have probably read this advice as a result.
Of course, the logic behind this plan is that the majority of our financial obligations – such as bills, interest payments, paycheque disbursements and so on – occur on a regularly timed schedule month after month. And, as many bloggers and commentators have noted, no two months are always the same insofar as the composition and breakdown of your budget – so being able to track and react to the changing volumes of spending in major categories is beneficial to your financial betterment.
The “one day a month” approach also makes sense in a world in which the size of everyone’s personal data stream – financial and otherwise – is getting bigger and bigger as technology allows for it. Peering directly into the rush of information is often intimidating, and windowing it into a single day keeps it from being a daily stressor – but it is by doing exactly the opposite, and by parsing this real-time granular information into meaningful conclusions, that financial technology is helping to improve the quality of financial health for its many consumers. Your information doesn’t just update one day a month. New, and often unexpected, financial requirements may introduce themselves into your spending and savings assessments with a tremendous impact, or with a subtlety that a monthly review may not detect.
For the individual, processing the data stream depends on having good questions to ask about it. Restricting yourself to a single, make-or-break budget will mean that you will almost inevitably be faced with the stress of having to make continuous compromises and modifications – things that will undermine your confidence in your own ability to plan your finances. Developing a solid set of inquiries about your spending and savings data – inquiries about your goals in the long and short term, your ability to respond to emergencies or unexpected events, and how the data reflects your habits and day-to-day activities – will allow you to make the most meaningful changes to better your financial wellbeing.