Welcome to the last Monday in the month of June 2022. As we all know, this means that we are fast approaching the end of the first half of the year.
Just like regular medical checkups are recommended to safeguard our wellbeing; periodic financial reviews are also encouraged to help in ensuring that we remain on course with our financial goals.
A half-year review is an opportunity to access how well or otherwise you are doing with your set financial goals. Given the current financial terrain and the various unpaid investments; many people sincerely may not be inclined to carry out this exercise (and I understand that).
However, it is never advisable to play the ostrich with the state of our finances – we need to be as realistic as ever in order to take the necessary steps towards financial growth.
Below are some of the things to do when carrying out such a review:
- Analyse your budget: For many people, this may currently be like trying to locate the road to Eldorado given how prices of practically everything have skyrocketed home and abroad.
During the exercise, you may need to adjust for changes during the year (promotion, childbirth, inflation etc) as well as ensure that your emergency fund is still sufficient or needs to be adjusted accordingly
- Plug leakages or eliminate unnecessary expenses: One major benefit of reviews is that they have a way of throwing up surprises.
If in the course of the review, you uncover necessary or duplicated expenses, ensure you eliminate them immediately. Sometimes, the discovery may be a pleasant one like unpaid dividends which is now surprisingly easy to claim.
- Assess your debt portfolio (if any): Another thing to do during a review session is to take stock of your debt. Are you on track with repayment or do you need to revisit your repayment plan (amount and tenor)? It is also important that the repayment structure is included in your budget in order to adequately provide for it.
- Calculate your net worth: This exercise is never complete without getting a true picture of your financial health as at a particular time. Given the current upheaval in global markets, you need not fear if it isn’t looking rosy at the moment. What is important is where you are vis a viz your long-term target.
An individual’s net worth is the value of his or her assets -both financial and non-financial less any liabilities.
When reviewing your financial health, you may also want to assess how you’ve fared with respect to other forms of wealth (health, social etc). Remember, if all you have is money, you aren’t exactly wealthy.
Given the recent extension of the ongoing voters’ registration exercise, all those yet to register are once encouraged to do so. Also, endeavour to do likewise to as many people yet to register around you.
Till we meet next month, do have a fantastic week and Q2!