Review    

Set it and forget it isn’t an approach that I find effective when it comes to achieving FIRE. A regular review is definitely needed. For me, things change constantly with our expenses and even our income. As part of my income is based on company performance, my month to month paychecks vary. When it comes to our expenses, some months are definitely better than others. I can’t believe how much a summer camp costs for kids!

Now, the most troubling thing I have encountered with my journey to FIRE is the tendency to obsess about the numbers. By obsess, I mean me checking the brokerage account balances daily after reviewing stock prices every 30 minutes throughout the day. After a few months of doing this when starting on my journey, I realized I had developed an unhealthy review cycle on my path to FIRE. That’s a good thing though. I learned what not to do!

Here

is the review cycle that works the best for me. Keep in mind it may look a little different for you based on your goals, but I hope this helps.

  1. I pay bills (including our credit cards) twice each month. I do this for a few reasons. A twice a month review of bills allows me to understand if our expenses are off track halfway through the month vs. after the month is over and I have a regular pulse on what’s in the checking account.
  2. I update my budget twice each month. Yep, you guessed it, every time I pay the bills, I update the budget spreadsheet. Twice per month coincides with how often I get paid as well.
  3. The net worth spreadsheet gets updated once per quarter. Admittedly, this is probably too often. If you update a net worth spreadsheet once or maybe twice per year, that will likely do the trick.
  4. Reviewing AND revising my overall budget takes place once each year at a minimum. Now, if income or expenses change significantly during the year, I’ll update more often.
  5. My overall FIRE plan is reviewed once per year. Am I still on track to reach the goal I set out years ago? If so, great. If not, I generally feed this back into my overall budget review and revisions.
review blocks

The secret

to success when it comes to review is to make sure you review the right information often enough to keep things on track but not so often that you obsess about numbers. You need time to adjust your plan and/or actions before it’s too late! If I were to wait until I turn 45 and then open up my bank accounts to see if I made it, well, that’s just not an approach I’d recommend.

My objective

again in this step is to get you comfortable with what to review and how often to review it. In other posts and resources on the site, you’ll see that I keep track of things like the breakdown of assets in retirement accounts vs. non-retirement accounts, the balance (and plan) of my daughter’s 529 accounts, as well as my monthly and quarterly savings percentage rate. Some of these things you may want to consider tracking and reviewing yourself. If so, be sure to loop back around to step one and educate yourself on the key aspects of these topics.

As you can see in this review step, we start to blur the line with the last step on the path to FIRE. So, last but not least, let’s take a look at Adjust.

Or, head back to all Six Steps.