I’ve always believed that you should treat your personal finances the same as you would a business. You’re both the CEO and CFO. You create the budgets and make the tough decision of how to prioritize who gets paid first.
In all other aspects of life, there is some type of assessment of how far you’ve come. Employers conduct mid-year reviews to discuss your performance so far and teachers give mid-term exams to determine how much you’ve learned during the first half of the semester. Even coaches use the half time to talk about what plays are or aren’t working and what to do differently during the second half. Like any other business, you should conduct a mid-year review with yourself.
Most likely, you made some type of financial resolution when the clock struck midnight on New Year’s Day. For most people, those resolutions were out of the window by January 15th. Hopefully, that’s not you. Take 30 minutes to an hour today to study your finances. See how far you’ve come in the past six months and then determine what you’d like to do next. Start with the following questions:
Once you’ve decided how well you’re doing, realign your goals for the second half of the year and map out a plan to reach your revised goals. If you plan to cut your debt by 25% by December 31st, write out exactly how you’ll do it. If you plan to work overtime or take on a second job to bring in extra money and funnel it all to your debt, then say so. If you’ll immediately transfer $100 to your debt on every pay day, write that down too and then automate it. Make the plan as easy as you can for yourself.
The last step of your mid-year review? Decide when you’ll conduct the next review. If your plans are complex and require a lot of moving parts, maybe another sit down at the end of the quarter is necessary. If not, then come back at the end of the year to finalize your 2012 goals and start planning 2013.