Bayport Blog

Mid-year money check-in

It’s been at least six months since you set your financial goals for 2022. Now is a good time to take stock of your progress and, if necessary, get back on track.

Just because you drew up a plan in January, doesn’t mean that life hasn’t happened in the meantime. Your financial plan spells out where you want to end up (eg, owning your own home, being debt free or having a tertiary education fund for your children), but how you get there is likely to change as your circumstances change.

A mid-year personal finance check-in is a great way to see what has changed in your life and if your financial roadmap needs to be tweaked as well. Here is how to do it.

1. List any life changes

Changing jobs, having a baby, getting married or divorced, moving in with a partner or friend or moving out to live on your own – these are all huge changes with financial implications. Your job is to work out the impact of any life changes on your monthly spending patterns and how you need to adjust your budget. For instance, if your new job is closer to home and you spend less on travel to and from work, what do you do with the saving? Or, if the new baby turns out to be more expensive that you had thought, where can you cut down on expenses to buy nappies and milk?

2. Budget for the second half of the year

Your budget, or spending plan, must be a living, breathing thing that you update every month. In addition, it is helpful to take a step back in the middle of the year and do some upfront planning for the six months ahead. For example, think about and discuss with your family, plans for the December festive season so that you can start saving for those holiday expenses.

3. Top up your emergency fund

If you have had to spend some of your money saved for emergencies, put a solid plan in place to get your emergency fund back up to where you want it to be. You can free up money by either cutting back on your expenses or by earning more with a side hustle or, if your job allows it, working some overtime.

If you have realised that you use your emergency fund for non-emergencies, open a separate bank account for it. That way, you’ll be less tempted to tap into it without good reason. Plus, you can see exactly how much you have at a single glance.

4. Check your credit health

Order your free annual credit health report to:

a) Get a clear picture of your credit status; and

b) Understand what you need to do to improve your credit health.

Your credit health status is an excellent indicator of how healthy (or not) your money habits are.

5. Take stock of your debt

How much debt do you have now and are you on track to become debt free in accordance with your financial goals? Do some homework to find out if debt consolidation can improve your debt situation and free up cash flow that you can put into savings. Or make a deal with yourself to use your year-end bonus to pay off a loan or two so that you can save on interest charges and reduce your monthly repayments.

6. Supercharge your savings

Seeing that July is National Savings Month in South Africa, use your mid-year review to focus on savings:

• Really look at your expense tracking over the first half of the year and find patterns and trends that are helping or hindering you to save. Cut out the bad habits and boost the good ones.

• Set yourself a savings target for the second half of the year and gamify it with a wall chart or by using a savings-tracking app.

• Give yourself fun challenges, such as seeing how long you can go without your favourite takeaway or soft drinks and put that money into a savings jar.

The more you work with your money, the better your money will work for you. A mid-year check-in is a powerful way to build a healthy relationship with your finances, and to get you closer to achieving your financial goals.

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