I’m a Financial Planner, and Here’s How I Manage My Own Money

• My job is to help others manage their finances, but I always make enough time to manage my own.
• I set financial goals that are realistic and stick to a detailed, strict budget to meet my goals.
• I also automatically save 30% of my earnings and review my portfolios and progress annually.
• Read more from Personal Finance Insider.

Managing your money can seem initially daunting and time-consuming, especially when there’s a ton of information out there. But taking control of your financial wellbeing will better prepare you for the future. 

I’m a financial planner, and while I typically help others handle their money, I make sure to always set time aside to manage my own finances. Here’s the four things I do to manage my money effectively.

1. I set financial goals that are realistic and flexible 

Everyone should have financial goals, but your goals need to make sense for you and your financial situation. They should align with your life and what you value in life. 

I definitely don’t want to rent forever — so a goal of mine is saving up for my first house. Another goal of mine is retiring early. Once I set these goals, I break them down into manageable steps to get me there. 

For example, I used a calculator to predict how much money I would need in retirement, and am setting aside money each month accordingly. I’m also investing money each month that will hopefully serve as the down payment on my first home. 

Financial goals can be large and small — I recently saved up to buy a pair of shoes I had been wanting for a while, and I’m putting aside some money in a savings account for a vacation to Japan next year. The goal of setting a goal is really to motivate you and keep you on track. 

2. I stick to my budget 

There’s no one right way to create a budget, but there is one right way to use a budget — using it consistently. Regularly recording your spending and saving will help you better understand where your money is coming and going. Identifying trends in your spending is key to creating better habits around money. 

I recommend picking whatever budgeting method works for you and sticking with it. I personally budget the old-school way, in a spreadsheet I created myself.

I use fairly granular tracking — for example, I have a line item specifically for Amazon purchases and another for media subscriptions. While this level of detail wouldn’t work for everyone, it helps me identify exactly where I’m spending most of my money and helps me find areas to cut back on. 

I typically input my purchases daily so I don’t forget. At the end of each month, I’ll go back and review my monthly spending and see how on track I am to reach my larger money goals. That way, I can make adjustments for the following month. 

3. I made savings automatic  

I currently have an emergency fund with around four months’ worth of expenses, and a high-yield savings account for “fun” purchases like travel or luxury clothes. I have three retirement accounts — a 401(k), Roth IRA, and Roth 401(k) — and two investment portfolios. 

I save around 30% of my gross income — 13% to my retirement accounts, and the remaining 17% to my investments and savings. I’m regularly putting money into all of these accounts, but I never have to think about them, because I make all my contributions automatic.

It only takes a few minutes to set up, but prevents me from forgetting to contribute money. It also helps me prioritize my savings and reduces the impulse to spend the money instead.  

I also make all my bill payments automatic too — the last thing you’d want to deal with is a missed rent payment.  

4. I review my financial progress annually

At the end of each year, I take a step back and reflect on the last 365 days of my financial plan. I revisit my goals and review how I’m tracking to reach those goals. This is also the time I’ll also make any adjustments to my plan.  

I’ll pay extra-close attention to my investment portfolio allocation — if I think it needs to be rebalanced, I’ll typically try to sell my stocks before the end of the year so I can write off any investment losses on my income taxes. 

I also try to take a moment to pat myself on the back for any positive progress I’ve made, big or small. Rewarding myself for sticking to my goals will enforce my good habits for the years to come.