If you are a New Yorker and lived here during the years of Mayor Ed Koch, you know he’d frequently ask, “How am I doing?” It was his way of taking a pulse check of the “people” during his three terms and between election cycles.

What a brilliant, yet simple, way to acknowledge that…

  • everything has a rhythm
  • everything evolves
  • there is always a gap between where you are and where you thought you’d be

With six months gone and six months to go, now is the perfect time to do a mid-year financial review. This is the perfect time to ask yourself the same question as Mayor Koch used to – especially with regards to your personal finances.

Before I share my recommendation of what this review should consist of (surprise, surprise, it’s not just about simply analyzing statements and reports, adding up debits and credits, and benchmarking whether or not you’re on- or off-course – though that helps!), let’s talk about an alarming statistic that a mid-year review can help address.

According to a recent survey conducted by Northwestern Mutual’s 2018 Planning & Progress Study, 44 percent of survey respondents stated that money is the #1 cause of stress in their life. It is “more of a problem than either personal relationships (25 percent) or work (18 percent).” The study went further on to say that financial anxiety has increased over the past year, up from 37% in 2017.

Money pressure is real

To some degree, everyone feels a bit of money stress.

Sure, for a good number of people the stress isn’t about daily survival.

But no one is immune from the pressure that comes with trying to figure out what to do; how to do it; if what you’re currently doing is right or sufficient; wondering if you are teaming up with the right people; if you are prepared for the unexpected; if you really have enough; etc.

These sort of questions/concerns pop up for everyone regardless of their income or wealth.

I happen to be one of those weird people that believes the goal isn’t to try to avoid financial stress. (I know…gasp!) Rather, I believe when stress surfaces it as an invitation to pause and ask yourself, “What is the stress trying to get me to pay attention to?” Most likely, this will lead to additional questions in the vain of, “have you done what mattered, when it mattered?” Or, more succinctly: “How am I doing?”

From personal experience and professional observation, money stress isn’t just about the results you are or are not getting. For most of us, the stress also stems from the degree of confidence you have about how you’ve made or are making your financial decisions and choices. The situation and the results (or lack thereof) often prompt a self-inquiry about whether what you are or are not doing is “right.”

This is when you begin to wonder if you missed important clues. This is when you might start to second-guess yourself.

This is when a mid-year review can become your powerful ally!

The Usual

So, let’s start with what you might typically expect to be part of such an evaluation.

Cashflow

When you look back over the first six months of the year, how often did you find yourself short — meaning you had to use credit or tap into your savings to meet your monthly obligations? If more than once, can you identify a pattern that can serve as a trigger of what to be on the lookout for as you plan and prepare for the next six months?

Expenses

All of my coaching clients have heard me say, “…every expense needs to fight for the right to be on your income statement.” When you look at your banking or credit card statements, on what are you spending your money? Are you getting the return on investment you want or need? Feel free to measure your ROI financially, emotionally, or simply through the lens of it making your life a bit easier.

Investments

Whether you’re looking at your holdings in a typical brokerage account, retirement account, or both, as the market has gone up and down, what’s your current allocation? Is it within an appropriate range of your target asset allocation?

Savings

Do you have more saved today than you did on January 1? Have you met your savings target, or are on your course to meeting it if you continue with your current pace?

Credit report

I know the common wisdom is to at least check your report once a year, but checking it twice and seeing if your credit score has increased since the beginning of the year ain’t a bad idea, either.

The Unusual

With the “usual” suspects on the table, now let’s talk about the unusual components of your mid-year financial review:

Habits

What money habits are you practicing now that you weren’t in January, and vice versa? How’s that working out for you; is it helping you achieve your goals or slowing you down?

Mindset

How has your mindset evolved in the last six months? What do you believe about money today that you didn’t in January, and vice versa? What do you believe about your financial power today that you didn’t in January?

Your mid-year review doesn’t just give you a snap shot of what’s happened with your dollars and cents over the course of six months, it reveals the nature of your relationship with money — right now.

And if you’re feeling any money stress, it can reveal the true source of that stress. Because sometimes, when you’re stressed out you can become so myopic working to relieve that stress, that you don’t take a step back to address the root of said and not just the symptom.

Even though I’ve made what I believe to be a pretty darn good argument for the value of doing a mid-year financial review, I can already sense the resistance to taking time to do this exercise. And, it is an exercise. It requires your time and attention. I get it…you’d much rather be on the beach, in the mountains, or doing whatever you do to slow down and take a break.

But the sobering truth is that the year has evolved. In some ways, how you expected. And in many others, in ways you could not have imagined. All of which, though, has had an impact on the condition of your finances and your relationship with money.

Like every other relationship you have, yours with money is multi-faceted and it needs to be nurtured. When you do a mid-year review you get to “audit” the health of your relationship and see what needs to change. And on the off chance you decide nothing needs to change – because you are right on track – isn’t it better to know that than it is to assume it?!

Asking yourself, “How am I doing?”, is a great way to take a pulse check and assess where you are vs. where you thought you’d be vs. where you need to be. Plus, it is the perfect way to determine if you’ve done what mattered, when it mattered.

So, my ardent request of you is this: Don’t let July come and go without you pausing to take time to do your mid-year financial review.

If you need an incentive, how about this: You’re freaking worth the effort!

p.s. If you need help completing your mid-year financial review, let’s talk and explore if working together makes sense.

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