People tend to get their tax returns and then all they see is cool stuff they can buy. The same goes honestly with any windfall – not having a plan in place spells disaster for finances! Do you know what you’re doing in April, during quarter 2?
“Wait,” you might ask, “what do you mean ‘quarter 2’?” If you’re not aware of the productivity hack of breaking your year up into quarters, then let’s start there and apply this incredibly powerful tool to your financials.
The quarter system is a method of tracking progress and goals that breaks your year up into 4 quarters. These run from January through March, April through June, July through September and ends with October through December. You can plan out your focuses during each of these quarters, doing a rough sketch at the start of the year and then honing each quarter down as your go through them. The best part of this process is that you can apply it to any goal, including just to financial and money management, OR you can weave your finances into an already existing quarter system.
We’re going to look at some ways that implementing a quarterly goals system can improve your finances dramatically. From knowing how best to earn extra cash, where your pay-off goals sit throughout the year or just knowing how you want to proceed on your various financial endeavors, a quarterly system can help with all of that.
How big business sees quarters
Companies use quarterly reports to determine how they’re doing in terms of sales. This gives them an idea if their goals are reasonable, if their efforts are working and if their planning needs tuned up. You might not be cranking out variable months of income in the six or seven digits, but a quarter system can still help you organize your incoming versus outgoing cash flow. This in turn can help you find out where, when and why spending increases or additional income decreases. Basically any extra useful data is, well, useful.
Take a cue from large companies and split up your year into quarters. Even if you have a steady, unchanging source of income like most people (office job, for instance), a quarter system can help you find out where fluctuations in your bills might pop up. For instance, things like car insurance, car registration, tuition costs and other school-related bills all tend to crop up at different times. These charges aren’t consistent throughout the year generally, so planning far in advance can make it easier to tackle them when they come up. Nobody wants to realize that their car sticker is up for renewal when they’re stretched thin already!
A quarter system helps you create attainable goals
If you start your year with vague notions of goals – weight loss, paying off debt, etc – you probably won’t get any of them done. Using a quarter system can help you make concrete plans that you can actually move towards. For instance, if your goal is to pay off your car loan in 2020, you can determine how much money you’d have to pay per quarter, how much extra you’ll need to bring in, and then make a plan on how to get those extra funds. In this way, your goals aren’t nebulous “somedays” but rather concretely designed ends you can actively work towards.
How A Quarterly Goal System Can Improve Your Money Management
Often, more data is just better
Corporations go back over their yearly reports to find what works and what doesn’t, making moves based on that data. The big difference here is that corporations typically employee thousands of people and they have financial directors to work on this type of data gathering. You are you, and pouring over a year’s worth of information by yourself can be daunting and honestly a huge waste of time. For the average person, if there’s something not working financially, waiting until the end of the year to observe and address it can be catastrophic or at least frustrating.
By implementing a quarter system, you can see every 3 months if you’re losing money, wasting money/time or if you’re on the right path towards your goals. This makes you more nimble and more able to adapt to random events. Quarter systems also allow you to lump your information up into more digestable chunks, making it easier to get to the exact information you need rather than combing through a year’s worth of receipts, notebooks and tax information.
Implementing a quarter system
Take a look at what you want to accomplish in the upcoming year, and then divide it into manageable goals that you can place in each quarter. The idea is to focus your efforts into meaningful, smaller goals that build towards the big picture. Refer back to your quarters and review at the end of each one; what is working? What needs to be changed, where can you move stuff around to pay something off sooner, or where do you anticipate a birthday, big bill or extra income?
Planning always pays off if it’s well-tended and maintained and the quarter system can lead to huge steps in improving your financial situation as well as your productivity and goal achievement.
Do you use a quarter system, and if so, have you applied it to the broader idea of your finances or just for non-financial goals? We’d love to hear about how this system has helped you or if there are any pitfalls in utilizing a quarter system you think others would need to know about.