The beauty of a financial calendar

No, I don’t mean financial calculator. Get a calendar together of when you’re paying what out and when you’re getting money in. You’ll be amazed at the focus it brings to your personal balance sheet

One of the best personal finance tricks I saw many years ago was when somebody mentioned their financial calendar to me. I thought I had misheard, and they were talking about a financial calculator — but no, it was a financial calendar.

The idea was simple. It tracked their financial responsibilities that were not monthly, so that they always remembered what and when.

Our monthly expenses are easy; they come at us fast, every payday, and with a budget we know what they are, when they happen and how much they cost.

But what about those less frequent expenses? For example, you may pay school fees quarterly, in which case you need to remember to save for them every quarter and to make the actual payment.

You could add other finance-related points, such as a reminder to check your credit rating. The law allows a free credit report every year for an individual. But there are different credit bureaus, and they each offer a free report every year. So once a quarter I go to a different agency and get my free report. An important feature here is to see if there is any debt you didn’t know about. That would likely be fraud, and needs to be dealt with ASAP.

I also expand my financial calendar to include expected dividend payments. Individual stock and exchange traded funds all have fairly regular dividend payments, so I record them for the months I expect them to arrive.

This serves two purposes. It’s easier to track the dividends and monitor the increased payment over time. But it also alerts me to when money will be flowing into my account, and that’s important. I’ll know which months are dividend heavy so I can plan what to do with that income. Mostly I just reinvest the dividends back into the market. But if I know that March is a large-dividend month, I could plan to use that money for a holiday or a deposit.

I have also been working on getting a spread of dividends so that I have income every month. On the JSE it’s not easy, and it certainly doesn’t inform my decision as to what to buy. But monthly income from dividends is the dream of all investors.

Other bits in my financial calendar are reminders to update the household budget and insurance. The insurance part is about calling my insurer and asking it to reduce the monthly rate. The budget review is just that. Last year’s budget is not next year’s budget. Things go up in price and our spending habits change.

I manage all this in an Excel spreadsheet coupled with an online calendar so that I’ll get an alert reminding me what I need to do in a particular month. Simple!