Nimi's Standard: 5 things to check for the mid-year review of your personal finances

[Stanbic IBTC team]

I don’t know about you but I keep feeling that this year is whizzing by! It is July already.

Most of us start each new-year with great plans but the problem tends to be with execution. In January, you had a clean slate and planned to start afresh; did you list the financial goals you wished to accomplish this year? When was the last time you reviewed those goals?

It is important to review the progress you are making with your finances periodically; half way through the year is a good time to take stock, and see if you have lived up to your own expectations.

Take an hour to study your finances this weekend. If you’ve made some progress in even two or three of the goals below, that is progress.

1. Did you put a budget in place?

A budget is one of the hardest things to put in place yet it is one of the most important steps to take in addressing personal financial issues. Do you have a clear idea of how much you are spending each week, or month? Have you tracked your expenses for a period and developed a clear picture of what can be cut back? You can use one of many online tools and apps or just simply get out a piece of paper and track your expenses manually. You can’t make much progress if you don’t know where all your money is going.

2. Have you reduced your debt?

Most families carry too much debt, and often resolve to get their debt under control. Have you taken steps to reduce your debt and do you carry less debt today than you did on 1 January? The general rule of thumb and the fastest way to reduce your debt is to tackle your highest interest rate debt first. By instituting automatic debt payments and making incremental principal payments each month, you will soon find your debt is under control. Don’t ignore your debt or wish it away; if it becomes a burden approach your lender and discuss the possibilities for rescheduling to make it more manageable.

3. Are you building your savings?

If you have not got a budget in place and you haven’t paid any attention to your debt, it will be difficult for you to save; they are all connected. The easiest way to grow your savings is to automate it by putting a direct debit in place so that you won’t be tempted to spend all your income but rather it can be directed to an appropriate savings vehicle. Most mutual fund companies make it easy for you to be able to automate your savings and investments. Most financial advisors suggest that you should save between 10% and 15% or more of your income.

4. Have you made a will?

Too many people avoid dealing with their mortality because thinking about death makes them feel uncomfortable. However, dying without a will, or a will that is out-of-date, can cost your loved ones a lot of pain and throw away decades of hard work. Knowing that your spouse and young children will be provided for should anything happen to you, will give you a huge sense of relief. Circumstances change. If you already have a will, when last did you review it and update it to make sure you have included any recently acquired assets or new beneficiaries? (Hello, bundle of joy!).

5. Have you invested in yourself?

You are by far your most important asset; with your knowledge and skills. Have you invested in improving yourself through further education either formal or informal? Consider how much you could improve your long-term prospects through personal development. Have you taken steps to safeguard your health as you get older through a sensible diet and exercise? By maintaining good health or taking active steps to improve it you could save yourself significant health and medical costs in future and be in a position to fully enjoy any wealth that you have accumulated.

The difference between those who attain financial security and those who do not, is simply the discipline to do something about their financial situation. If you are on track, congratulations! If not, don’t worry, there is still some way to go this year to put things right, but you do need to get started.
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Nimi is the founder and Chief Executive Officer of Bestman Games Ltd who recently launched the City of Lagos Edition of Monopoly, the first African city edition of the world famous board game. Before Bestman Games, she enjoyed a successful banking career spanning 23 years first at Stanbic IBTC, where she rose to the position of Head, Private Banking and Director of Stanbic IBTC Asset Management Limited, and later at Barclays Bank