Now that half the year is gone, it’s a good time to take a look at your overall financial situation to see how you’re doing so far this year. Here are some things you should include in your mid-year finance check up.
1. Progression toward your salary goal.
You should have started the year with an idea of how much money you wanted to make this year. Divide that number by two. Hopefully you’ve made that much money so far this year. For example, if your salary goal was $60,000 for this year, you have hopefully made $30,000 so far this year. If you’ve fallen below the halfway point it doesn’t mean you won’t make your goal. Similarly, making more than the halfway amount doesn’t guarantee you’ll meet or exceed your salary goal.
2. Your current rate
Checking your rates once a year isn’t often enough. Since you’re looking at all your finances anyway, it’s a good time to asses your rate to be sure you’re charging what you’re worth and that you’re charging enough to cover your expenses.
3. Your personal and business budget
Things change throughout the year. Now is a good time to review your budget to make sure it matches your situation. If your income or expenses have changed, adjust your budget to reflect that. If you’ve gotten married or divorced, had a child or recently become pregnant, you’ve lost a major client, bought a house or car, or paid off some credit card debt, adjust your budget to reflect that.
4. Your spending
If much of your spending is done through your checking account, you can use a free online website like Mint.com to help analyze your spending. Mint automatically categorizes and sums up your transactions to make it easier to see where your money is going. Compare your monthly spending to your budget to be sure you’re sticking to the plan.
5. Your estimated taxes
If you’re making more money than you thought, you may need to adjust your estimated tax payment. Otherwise, you might end up underpaying and could face additional taxes and penalty next April. Overpaying is undesirable, but you won’t have to pay a penalty on the amount you’ve overpaid.
6. Retirement savings and other investments
If you haven’t started putting money into savings either for retirement or an emergency fund, it’s not too late to start. Use your budget to figure out what you can afford to set aside each month. Even just $25 a month is better than nothing – by the end of the year you’ll have $150.
7. Christmas savings
I know it’s six months away and that’s just the reason that you should start saving now. It’ll take away the last minute pressure of coming up with extra money for gifts.
8. Your credit report
You can get a free credit report from AnnualCreditReport.com. This is the only site that allows you to order your free credit report that’s outlined by Federal law. Other free credit report websites require you to enroll in trial subscription that you’ll need to cancel in a few days to keep your credit card from being charged. Check your credit report to make sure all the information included is accurate.
So far I'm on track to meet my annual salary goal for the year and I'm fine with my current rate. How are your finances doing so far this year?