Financial status assessment midway through the year: Examine, adjust, ponder, and adjust accordingly
In the midst of the busy year, it's essential to take a step back and assess our financial standing. Rita-Soledad Fernández Paulino, a renowned money and self-care coach, educator, and podcast host, emphasises the importance of such a midyear check-in. Specialising in guiding BIPoC, women, and LGBTQ+ individuals towards financial independence, she offers valuable insights into managing debts effectively.
To begin, gather your current debt information. Collect the total balances of all your debts, and note any changes in interest rates, minimum payments, or account status since the start of the year. This data will serve as the foundation for your assessment.
Next, determine your progress so far. Calculate the amount of principal you have paid down year-to-date, and the interest you have saved by paying down debt early or refinancing. Check if you are on track with your original debt payoff goals and timelines.
As you evaluate your progress, don't forget to review and revisit your financial goals. Confirm whether they are still realistic and relevant, and adjust timelines or contribution amounts if necessary, based on any changes in income, expenses, or priorities. Reframing large goals into smaller, manageable milestones can help maintain motivation.
A crucial step is to evaluate your budget and spending patterns over the past six months. Identify areas where you might be overspending, look for recurring charges or lifestyle changes that could impact your ability to pay down debt, and update your budget to reflect current income, expenses, and priorities, potentially reallocating funds toward debt repayment.
Take note of changes such as interest rate increases, new fees, or unexpected expenses that may slow your progress. Consider any income changes (positive or negative) that would affect your repayment ability.
If you find yourself unsatisfied with your progress, there are strategies to consider. Increase debt payment amounts, refinance or consolidate debt, cut non-essential expenses, prioritise high-interest debt, and set new or adjusted goals.
Finally, develop a clear action plan for the second half of the year. Based on your midyear findings, create specific targets and strategies to meet your adjusted goals, and schedule regular checkpoints to monitor progress and adjust as needed.
By following this structured midyear check-in—reviewing your numbers, recognising changes, and adapting your plan—you can ensure your debt payoff strategy remains effective and achievable through the rest of the year. This proactive approach helps optimise financial health and keeps your goals within reach.
Rita-Soledad Fernández Paulino's holistic approach, blending personal finance education with self-care, offers a unique perspective on managing debts. She founded Wealth Para Todos, a platform that encourages individuals to reflect on what they've been navigating in the first half of the year, including health, work, caregiving, relationships, grief, rest, and joy, as they work towards financial independence.
Personal finance is an integral part of assessing your financial standing, especially when it comes to managing debts effectively. To optimize your debt management strategy, gather debt information, review progress, and adjust financial goals, making corrections to your budget and spending patterns as needed. Rita-Soledad Fernández Paulino's comprehensive approach incorporates personal finance knowledge with self-care, emphasizing the importance of considering overall well-being while working towards financial independence.
