My Money Routine
15 Jan 2024 – Hello again. Today I will be sharing my monthly routine that I perform to manage my finances. There are actions that I perform annually as well, but that is less important to me, so I will leave that for another time.
- 1st calendar day – Log down my assets and liabilities, as well as investment performance
- This allows me to calculate my net worth, comparing it against my annual projections and previous month. I would be able to tell how well I did the previous month.
- I would also transfer money to balance out the money available between my various accounts according to how much I expect to spend from each of them, their minimum required balances, and leave the rest in the account with the highest interest as an emergency fund.
- It also gamifies the process of saving and investing, giving me a source of fun and excitement while pursuing delayed gratification.
- As part of this activity, I also classify my assets into various categories such as savings, speculation, equity investments and fixed-income. With the categories I would then do a projected future passive income.
- The general advice given for beginners to investment is to invest and only look at it years later. This is because there is a tendency for people to make irrational and rash decisions when they look at their investment performance. I have been able to continue sticking to my investment plan no matter what happened the previous month, but you may want to skip this if you do not have the same discipline.
- 1st trading day – Place my investment orders
- From the first activity in my routine, I would have calculated the amount of cash I have in excess for investments.
- I would generally place my equity orders on the London Stock Exchange, and they only open in the afternoon in my local time. I also sell options on the Chicago Board Options Exchange, that open in my night time. So I have quite a narrow window of time to do this.
- I use options as a way to get leverage into equities when I am too over-weighted into fixed assets. They also give me exposure to market returns while being not being perfectly correlated.
- 8th day – Log my previous month expenses
- This is the day when all my bank account statements for the previous months are released.
- I only track my expenses monthly, so I rely on my bank statements to keep the record.
- I generally do not track cash expenses, and just record any cash withdrawals as an expense.
- The expenses are used to project future expenses, which are then used to calculate my emergency fund required
- 15th day – Invest my CPF
- The CPF contributions from my previous month’s salary gets deposited into my CPF account on the 15th.
- I currently invest the Ordinary Account amount above the $20,000 figure into equities via a robo-advisor into a broad unit trust.
- In the past and perhaps in the future, in a lower interest rate environment, I would opt to leave my CPF funds in the OA to earn the 2.5% which is above market rate.
- 18th day – Pay my credit card bills
- A lot of my expenses are on credit cards as well, and the expenses here also go into my expense tracking file
- I generally use set up automatic payments for my cards so that I minimize risk of missing payments. But I still check the statements once they are in to make sure any unwarranted transactions gets reported to my bank.
So that is what I do every month to keep my finances on track. In future posts I will go into more details on how I perform each activity. If they change in the future, I would post an update on why I changed it too.
Join the Conversation
What is your finance routine, and how does it differ from mine? I would like to hear any suggestions on any improvements I can make.