By Michelle Wanjiku
Every time we usher in a new year we come up with a set of resolutions that we are supposed to fulfill before the year ends. Most of the goals set usually revolve around finances. be it you want to buy land or save up a certain amount of money. But how many of us get to do that?
Usually by the end of the year when you look back you realize you didn’t get to achieve any of those goals. This is why it is important to conduct a mid-year review on your finances to evaluate your current financial position.
Because it’s been six months since you made those financial New Year resolutions, the question is are you still on track with those resolutions?
So here are a few steps to help you conduct a mid-year financial review
1. Get your full financial picture
Do you have any idea exactly how much money you have and what you are worth? It’s very difficult to come up with a financial plan if you have no idea where you stand in terms of finances.
According to Stefanie O’Connell, a money expert; to know where you stand financially, you need to look at more than just what you earn every month, look at your savings, investments, things you own as well as how much debt you have.
This gives you an idea of how you’re doing financially and it helps you decide where to focus your efforts.
For example, add all your debt together and see just how much money you owe, doing this might help you decide to prioritize paying it off quickly. By coming up with an achievable payment plan.
According to Robert Kiyosaki, author of Rich Dad Poor Dad, “Debt-free living should be your passion if you want to achieve financial freedom.”
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2. Review your goals
Goals are meant to give you some sort of guidance and direction. In order to achieve something, you need to have a clear idea of what it is you want and how to achieve it.
However, you have to remember that priorities change so your goals should change as well.
It’s especially important to keep reviewing your financial goals regularly and ensure that they still align with your plans.
If you set goals back in January or at the end of last year, do they still make sense? Are you still on the same financial path you were then?
For example, if one of your goals was saving to buy land by the end of the year, but you’ve decided to press pause on that, have you set another goal in its place?
Life doesn’t always go according to plan so you have to make sure that you’re adjusting your goals so your money lines up with your priorities.
3. Check-in on your budget
Hopefully, you have a budget.
Budgeting is a great way to keep track of your spending and can also prevent you from spending your money recklessly.
Mid-year is a good time to look at your budget and see whether you are sticking to it or you need to make some changes. Are there places where you’re overspending?
Look at your spending for the past few months and see how it compares to your budget. Then, make any adjustments needed.
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4. Check in on your retirement contributions
How much money do you set aside for your retirement monthly?
Naturally, you cannot work forever; a time will come when you will no longer be earning a salary. Have you planned for this time? Where will you be getting money from?
You don’t want to start asking other people to take care of you after you retire or be forced to change your lifestyle because you can no longer sustain it.
You want to relax and enjoy your life after you retire but you won’t be able to do this if you don’t prepare for it.
This means coming up with a plan to have money to use when you do retire. Saving for retirement is something you should start doing very early on in life.
Keep in mind that the earlier you start the more money you will be able to save.
How much did you plan to put aside for retirement this year? Are you on track or do you need to set aside a little more money to reach your target?
5. Research your salary
Is getting a salary increase something you want to do this year? Then this is the best time to start asking for it.
However, before you decide to ask for a raise you need to find out what you should ask for. This can be done by researching your salary. Take some time to benchmark your salary against competitive salaries in your field.
This data will help you know what you want to negotiate for and you’ll be prepared to start having this conversation with your boss.
Financial planning is the best way to ensure financial success. But just having a plan is not enough; you need to ensure you stick to your financial plan. This is why you need to conduct a mid-year financial review.
A mid-year financial review is like having an accountability partner, in that it gives you a chance to see what is working and what is not and helps you make informed decisions going forward.