“Wonder is the foundation of all philosophy, inquiry the progress, ignorance the end.” ~ Michel de Montaigne
Executing your personal finance strategy takes more than a New Year’s resolution, it is a continuous process. You need discipline, education and constant reviews of our financial journey throughout the year and indeed your entire life.
With only a few months remaining to the end of the year, taking a glance at your financial strategy can motivate you to keep working towards your personal finance goals, as well as highlight areas that may need some improvement. Right now is the perfect time to pause and assess, so you can perhaps make adjustments, and finish strong.
Below are a few areas to evaluate to ensure that we are on track with our financial goals for the year 2019.
1. Review Your Debts
The first step in the review is to check your debt level to assess how your strategy has affected your personal finances. Assessing your outstanding debt and repayment history will help you gauge whether or not your personal finance strategy is working for you or not.
If you find that you are struggling to clear your debts, it is an indication that your expenses are exceeding your income, which is a red flag. You need to get out of this hole using a sound budget.
[Read More: Budgeting Strategies That Work]
2. Evaluate Your Budget
Sticking to a budget is the most effective way to meet your financial goals, but this is easier said than done.
A mid-year financial review will help you determine whether you are saving enough for your goals and paying off debts sufficiently. In addition, life changes can throw your budget off balance, so it becomes necessary to examine your personal financial goals and reorganize your budget to adjust to these changes.
3. Evaluate Your Emergency Savings
Consider boosting or refreshing your emergency savings. Maintaining 3 to 6 months of living expenses in a liquid, easily accessible avenue is a general rule of thumb. However, consider your individual situation and determine if you need to increase your reserves to potentially cover a longer time period.
4. Evaluate Other Financial Goals
You probably had other financial objectives such as saving for retirement or establishing a side hustle. How are they faring? Monitor the progress of each goal based on the milestones you hoped to achieve by now and adjust accordingly.
5. Get A Jump Start On The Holiday Season
The distant future is just as important as the near one. Give yourself a debt-free holiday by putting away cash for the upcoming holidays in a Savings Plan. Start putting away a few extra shillings each week now, this can potentially help ease financial strain in the coming holiday season.
Remember, Njaanuary is usually a result of unplanned holiday spending.
Performing a financial review is not only helpful for confirming what has happened and shedding light as to why your results are what they are, but it can also serve as a preview for what is yet to come. Merely creating a financial plan is not enough, timely reviews are imperative if you endeavor to meet your financial goals.
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