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Using RightCapital to review your budget

For many, the new year represents a fresh start, fraught with resolutions and promises. If you’re not already engaging in the practice of setting up an annual budget, this is the perfect time. And if you are already doing so, then this is the time to review your past budget and make any necessary adjustments. After all, high inflation will certainly drive your spending in some categories higher.


Most of us budget monthly, and that is the correct way to do it in most cases. The single largest expense for most people is the rent or mortgage payment, which is generally measured monthly. Therefore, budgeting monthly is the most rational timeframe. However, without taking a longer look across the financial horizon, you can miss some of those quarterly or annual expenses until they arrive.


The process here is not difficult. Begin by writing (or typing) a list of all of the things you plan to buy this year. It doesn’t have to be as detailed as “milk, eggs, and bread”; just a category for groceries will do. Continue along with the staples of life, such as rent, utilities, and fuel. But once you have reached the bottom of the typical budget line items, it’s time to think a bit more “big picture.”


Consider items that you need to purchase less frequently than monthly. This could include things like HOA dues, insurance premiums, tuition, and holiday spending. Once you have assembled your list, add the amount you expect to spend in each category and add up the total. Divide that total by 12, and you now have a new line item on your monthly budget for “irregular spending.”


For example, let’s assume that your total of big picture items comes to $3000 for the year. Divide $3000 by 12 months, and you will uncover that you need to be setting aside $250 each month into a side account to cover these items.


Perhaps the best way to manage these irregular budget items is by using budgeting software. There are scores of apps and programs that can help you with this, including our very own planning software, RightCapital.


The first thing you will need to do is make an electronic connection between your spending accounts and your RightCapital profile. Once you have logged into RightCapital, go to the Profile tab and select Link Account. Find your financial institution, input your online credentials, and RightCapital will import your transactions.


Once that is done, head over to the Dashboard tab and select Budget from the sub-menu. This is where you will input your budget limits in each category. The software will automatically categorize your transactions, but you can manually adjust these on the Transactions tab. If you need to add new categories, you can do this in the Settings tab.


That’s it for the prep work. Your budget is now set up in RightCapital. I recommend logging in weekly and making sure your expenses are assigned to the correct categories. This will allow you to track your progress weekly and identify if there are certain categories in which you are exceeding your projected amount.


While there are a lot of techy budget solutions on the market, the advantage to using RightCapital is that it will tie the day-to-day and month-to-month into your long-term plan. Once you have the hang of the day-to-day expenses, go into your settings and add categories for those irregular spending items mentioned above.


Once built, this program should streamline your budgeting process and require only about 15 minutes weekly to stay current and accurate. Engaging in this regular process will help you to stay on budget throughout the year, avoid getting surprised by irregular categories, and ultimately keep you on track to reach your long-term goals.

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