Not your normal mid-year review for a not your normal year

07/01/2020

All of the financial plans you made at the beginning of this year might have changed drastically over the last few months. With a changing situation it is more important than ever to review your current financial situation and update your priorities.
 
What is the number one goal in performing a mid-year checkup?
The primary purpose of the mid-year review is to determine if there are any looming financial issues so that a plan can be developed for moving forward in the best possible manner. Many will have suffered some type of monetary change and these need to be addressed sooner rather than later.
 
What are some of the biggest changes that need to be reviewed?
The most impactful changes would those related to income, debt or decrease in savings or your comfort level with them for the rest of the year. Any changes in these areas will have a varying degree of concerns because of the additional issues these changes can create for a person’s financial outlook.
 
Are there underlying concerns or issues that these changes can cause?
The long term impact of any of the previously mentioned financial setbacks is that it can become a snowball effect. Loss of income leads to less money for monthly expenses which can cause people to stop paying bills which leads to loss of services, bad credit and potentially loss of transportation or housing.
 
What is the way forward if anyone has experienced any of these financial setbacks?
It is very important to focus making the best financial moves given your circumstances. It starts with dividing your expenses into three broad buckets – expenses that are fixed, expenses that can be reduced and expenses that can be eliminated. The next step is to work on the last two buckets so that you can determine the amount of money you need each month.
 
What moves should people consider for expenses that are fixed?
If these expenses are transportation, housing or other debt related expenses, talk to your lender and see what relief they can provide. Working with your lender will be the best way to avoid further financial issues and perhaps retain your credit score which is important for your future. Any additional cash flow or relief from these efforts, even if temporary can make a difference.
 
What should be the overall outcome for this mid-year review?
When you are finished, you should have a realistic budget of what level of spending your income can now support and a detailed plan of expenses that need to be trimmed or eliminated. You will also be able to make smarter day to day financial decisions because you have taken the time to understand your current situation.

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