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Why is July the time to complete the mid-year review?

With half of the year in the books, are you where you thought you would be financially?  Is your plan a little off track? Getting your plan back on track as quickly as possible is extremely important.  July is a great month to review your plan and make adjustments or recalibrate your financial plan based upon a detailed analysis on your performance.
Why do you suggest a thorough mid-year plan review?
The biggest reason is that if you are not on pace to meet your goals, you have plenty of time to make minor adjustments to still achieve your desired goals.  If you wait until the fourth quarter, it will take drastic measures to make a difference.  And this can often lead to abandonment of your plan which is a recipe for financial difficulties in the future.  Small incremental change is always easier than drastic changes.
What is the first key area to review?
Review your spending habits and see if there are any categories that are continually over budget.  If there are make adjustments by lowering spending in another area to compensate for the category that has increased spending.  This ensures you don’t spend more overall than you were planning to spend.  Without a mid-year review, you might not really solve this issue.
Where should our next focus be?
Next review your amount of debt, especially credit card debt.  You should not be increasing dramatically in this area unless you had a specific pre-planned reason.  If your plan was to decrease your credit card debt make sure you are on track to reach your yearend goal.  If needed, make adjustments in other categories to increase payments to your debt. Doing this now will help to minimize the amount required to get back on track.
What should we review as it relates to savings goals?
The biggest is making sure the emergency fund is increasing and has enough funds for 6 – 12 months of expenses.  We often times use the emergency fund and then don’t develop a plan to replenish it which is not a good way to keep your emergency savings properly funded.  Another good strategy is to develop savings goals for specific reasons so that you don’t have to use the emergency fund as often. For example, establishing a car repair fund, a roof replacement fund, etc an all help you avoid having a depleted emergency fund.

Posted: 7/14/2014 with 0 comments

Categories: Budgeting, Finances, Money Matters

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