Halfway through the year, how are your finances doing?

By the middle of the year, many people take stock of their financial goals and assess whether they are still on track. A mid-year review offers an opportunity to examine savings, spending habits, debt levels and income growth, helping to identify both progress made and areas that need attention.

However, financial literacy expert Patrick Wameyo says financial health should not be assessed only twice a year. Ideally, financial reviews should take place daily, weekly or monthly.

According to him, the goal is to monitor behavioural changes and measure whether they are producing the desired financial results. While waiting six months to review finances may limit opportunities for timely adjustments, he believes a mid-year check-in can still provide valuable insight into how close people are to achieving their goals.

Patrick adds that financial goals do not fall on their own, but people fail to align with the activities and amounts allocated in the budget. A budget, he explains, is only a document until spending and saving habits align with the plan.

“Financial goals don’t change. People drift from their financial plans by mid-year because human beings can change their minds. The real issue is a lack of execution as planned. Enhancing the habit of execution enhances financial outcomes,” he says.

He notes that the parts of finances that people should pay attention to depend on the individual and the primary goal they have set for themselves at the beginning. Still, financial reflection should cover all facets of personal finance, such as savings, spending, investing and borrowing, since they are all intertwined.

A realistic budget, he adds, is aware that circumstances such as inflation and unexpected expenses can change financial priorities. When resources are constrained, essential activities should be prioritised before less important ones.

Six months of financial activity can reveal long-term good and bad spending habits. One of the biggest warning signs, he points out, is unplanned spending that takes away funds allocated for something else.

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He also indicates that inflation is a major factor that affects household finances. As prices rise, the purchasing power of money declines, thus making it harder to meet needs and wants at previously budgeted levels.

While savings are important, he discourages viewing savings as the ultimate financial goal. Instead, he encourages people to review whether their savings strategy still takes into account the economic state and supports various financial objectives, such as access to loans or future investments.

Mid-year is also a chance to evaluate debt levels and their impact on monthly cash flow. He views debt as a tool that can either increase earnings or magnify losses.

“When the cost of debt increases, it increases pressure on money available for other activities. To regain control, borrow only what you absolutely need and avoid borrowing for consumer purposes,” he says.

Similarly, maintaining sufficient financial breathing room after loan repayments can help households absorb risks such as rising interest rates.

While some financial experts encourage a mid-year income review, Patrick does not see it as an absolute necessity. However, he believes those seeking to improve their financial position should focus on finding additional income sources that do not demand their time, as opposed to cutting costs.

“Cost-cutting is easier but has a lower impact in the long term. Income growth is more difficult but is the real deal,” he suggests.

He asserts that financial goals do not change during the year; the real issue is a loss of focus. When reassessing goals, he recommends prioritising those with the greatest long-term impact. Major financial decisions, such as home ownership, can be beneficial if they are affordable relative to income, but they can also be a burden if they consume too much of a household’s resources.