Most people focus on their finances at two primary times a year: the very end or beginning of the year and come tax time. While these are great times to focus on your finances it is important to remember that the year is long and your life and the world around you is constantly changing. Since we are closing in on the first half of 2007 already it is a great time to review some key financial items now before the end of the year is upon us.
So over the next few days I will be going over a few key items that should be reviewed this time of year. By checking up on some of these items now you will find it easier to stay on track and potentially find some items to address now before it becomes an added burden closer to year-end.
Part 1: Review Your Goals and Progress
If you are like most people you probably set some goals early in the year either part of a new year’s resolution or just trying to get a fresh start on something. Have you stuck to achieving those goals? Have you been regularly tracking your progress? If the answer is no, this is a great time to revisit the goals and to see where you stand.
Was your goal to reduce debt? Increase savings? Get a raise? Buy a house? Whatever your goals are it is important to keep tabs on them and track your progress. We live busy lives and it is all too easy to get caught up in other things. There are a few steps you can do to get back on track:
Identify Your Goals – If your goal was to reduce your credit card debt by $5,000 this year, write it down. If you wanted to build up an emergency fund that could cover two month’s expenses, write that down. It is one thing to have goals in the back of your mind but it is something entirely different to physically write them down. Take a moment to identify the goals you had set and write them down. Also, remember that a lot of things may have happened over the past six months and you may have some new goals to add. Better to add them now rather than waiting until next January.
Track Progress – Once you have clearly identified your goals you have to track your progress. You need to have a gauge to measure success or it will seem very difficult to accomplish what you have set out to do. Since we are at the halfway point in the year it can make measuring this success a bit easier. Back to the reducing debt by $5,000 example, you should be able to look at your situation and hopefully find your debt at around $2,500 lower at this point. If it is lower you know you’re well on your way and if it is higher it can signal something that needs more work.
Take the Next Action Steps – Identifying your goals and tracking your progress are the easy parts. Taking the action necessary to reach these goals is often the most difficult. If you are falling a bit short in reaching one of your financial goals at the midpoint in the year this is a perfect time to make adjustments. It is easier to make small changes in July to get you back on track for the year than it is to find out come January that you were way off the mark. Whether it is saving more, spending less or anything else it is much easier to make small changes along the way rather than more drastic changes less frequently.
For more detailed information about the importance of setting goals and creating a plan to achieve them I encourage you to check out number 23 in the list of 24 signs that you could be in financial trouble: A Lack of Well-Defined Goals and a Plan to Reach Them.
Be sure to check back tomorrow for the next item for your mid-year financial checkup.
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.
