A lot of us only do a once-a-year check-up on family finances, but I truly believe that a mid-year check-up on family finances is very necessary, as well. If you haven’t done a mid-year check-up before, you might be wondering where you even start with this. Here are a few things to tackle at your mid-year check-up:
Revisit your monthly budget
Remember sitting down in December and crunching all those numbers? There’s no need for such a detailed job again, but take some time to review your monthly budget. Are you sticking to the planned budget for every category? Are you overspending in some categories or under-spending in others? Do you need to adjust your allotted budget in some areas or maybe trim your discretionary spending across the board? Review your spending over the last few months and make any necessary changes so your budget can continue working for you. Be sure to account for any significant life changes that may alter your financial needs, such as a marriage, the birth of a child, a divorce or a job change. By reviewing and adjusting your budget, you will avoid falling into the mindless spending trap and you will be taking proactive steps toward staying on top of your finances for the rest of the year.
Anticipate upcoming large expenses
Now that you’ve updated your monthly budget, take a moment to list any large expenses you anticipate having in the next six months. This can include household appliances that may need replacing, expensive car repairs that will likely become necessary, or an anticipated medical expense that is not fully covered by insurance. Once you have this information in hand, determine which spending category you will take the money from to cover these expenses. Do you have a rainy-day fund that can pay for one or several of these costs? Can you use the money in your emergency fund? Make the decision about sourcing this money now so you don’t make the wrong choices when you’re stressed and pressed for time in the future. If you do not have enough money set aside for these expenses, build a savings plan into your monthly budget now so you have the funds available when you need them (more info on this next).
Tackle your debt & rebuild your emergency fund
If you have any debt, check in on that + create a game plan for the next six months so that you are able to tackle it faster. Take it one debt at a time, if you need to. See if you can trim your budget or boost your income in any way to increase your payments on this debt. Once you’ve paid it off, move to the next one on your list so you’re on your way to a debt-free life. Another important aspect to your finances is to rebuild your emergency fund. I put this in the same paragraph with debt because some people try to tackle debt first and then build up their emergency fund, or you can build up your emergency fund and then tackle debt. I prefer the latter because if you do not have an emergency fund when an emergency happens, you will create more debt for yourself.
Check-in with your accountant
First of all, do you have an accountant? If not, that’s the first thing you need to do. Hire one. Get financial help. Get a CFO for your business. Whatever you need, do it. If you are not sure where to start, check out Right Choice Accounting Solutions. They are your one-stop shop for all remote CFO services. In addition to taking care of your family financially, you also need to take care of your business. Right Choice Accounting Solutions helps service-based business owners save time and money with strategic accounting and tax solutions. They are your outsourced accounting team and they can cover things like bookkeeping, payroll, tax planning, financial coaching and so much more. Their solutions are catered to YOUR specific needs. They say, “It’s important for all small businesses to put accounting systems in place early on to create a scalable foundation and avoid potential business issues. “Accounting is the language of business” and we speak it fluently. Your business has specific needs, so we create specific plans for your business. Simply put, we offer our clients less stress, less financial problems, more time, and more money. Who doesn’t need more time and more money?”
Pat yourself on the back for your financial successes
Your mid-year check-up on family finances is not all about changing the things you have been doing. Once you have everything reviewed, and a new plan in action, look at the things that you did right over the past 6 months: I’m sure you did a lot of things right! Maybe you saved more in retirement or in your emergency fund. Maybe you paid cash for a lot of large expenses, or maybe you already renegotiated your cable bill and saved yourself $50/month. Whatever it might be, you did a great job, so celebrate that!