A mid-year review of your financial plans is one of the best things you can do for your financial health. This is an ideal time to reevaluate your current financial state and year-end goals. Being aware of how much money you have coming into and going out of your account every month, as well as how much you are saving, can not only improve your financial wellbeing but it can also decrease stress levels.
In this post, we share our three top questions that you should ask yourself along with tips on how to finish the year strong.
1) Have You Hit Your Savings Goal So Far?
If you did, great job! If you didn’t, that’s okay. Sometimes you just need to regain your motivation to save. Feeling unmotivated might be a sign that you need to reevaluate your financial objectives. Often people lose focus when it comes to their goals and spend money on things they want in the present rather than on their future goals. The truth is, it is easy to forget your financial priorities and stop making progress, but setting small goals and reminders will get you back on track in a jiffy.
First, identify a savings goal and make it specific. In other words, you’re going to want to try and set goals that have a firm and measurable goal in mind, along with a deadline by which you’ll hold yourself accountable. In order to make your goals more achievable, think about the difference between saying “I want to save more money” and saying “I want to save $10 a week for the rest of the year.”
Secondly, keep your goals somewhere you can easily see them. Posting a note on your refrigerator or pinning it to your desk can help you remember it. Your goals should be posted in a location that regularly reminds you what you’re working towards.
Finally, review your goals at least once a month while reminding yourself that a need is different from a want. It’s a good idea to list all the discretionary expenses you incur such as clothing, jewelry, and personal items and evaluate what you can live without. Also, make it a point to examine all your subscriptions and memberships. Have you ever tallied up all of your subscriptions and memberships for one month? It’s not uncommon for subscriptions like Netflix, Hulu, Disney+, Spotify, Apple TV, Amazon, etc. to cost $50-$100 or more a month. Consider each one carefully and decide if it is worth the investment.
2) Have You Reduced Debt?
You did? Fantastic! If you increased your debt or it stayed the same, fear not. The bestway to pay down your debts is to pay off those with the highest interest rates first. By following this strategy, you will pay off your debt faster and with less total interest over the long term. Always remember to make the minimum payment on all your debts, and then every additional dollar goes towards the debt with the highest interest rate. When the loan with the highest interest rate is paid off, move on to the loan with the next highest interest rate, and so on until you reach the end of the line and are debt free.
3) What Is The State of Your Emergency Fund?
You’ve got a solid cushion of at least 6 months? Wonderful news! However, if yours is a little on the light side, starting with a small goal can be lifesaving. To protect against an emergency such as illness or job loss, experts recommend putting away three, six, and even nine months worth of take-home pay. By starting with a goal of $500, it’s easier to save more money long term. Getting started with a small amount of money can be a positive psychological experience. As soon as you have managed to save $500, challenge yourself to save $1,000 next time.
It is possible for you to make significant progress financially with just a little effort. By making simple changes, you can improve the quality of your life to live longer, healthier, and more comfortably.
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