IN the fast-paced world we live in, it's easy to get caught up in daily routines and lose sight of our financial goals. Just as a long road trip requires occasional pit stops for rest and refueling, our financial journey also benefits from regular evaluations and adjustments.

Taking a moment to reflect on your financial progress can provide valuable insights and help you stay on track. As we move into the second half of the year, now is the perfect time to take a financial pit stop, assess your achievements and make any necessary changes to ensure you end the year on a strong financial note.

A pit stop is a short stop we make during a long journey to eat, rest and refuel. In the world of financial planning, making a financial pit stop is equally important as setting your yearly financial goals. As we enter the second half of the year, I encourage you to take a financial pit stop.

It is the time of the year when you think and evaluate how far you have come in achieving the financial aspirations you crafted at the start of the year. It is also the perfect time to assess and make the necessary adjustments to end your year financially better.

Here are the things you need to include in your financial pit stop:

1. Review your financial goals. Congratulations if you have a formal financial plan written at the start of the year, you are one step ahead of everyone. But frankly, most people do not have one, and if you are part of the majority, this is the best time for you to create and write down a financial goal for yourself. It need not be formal; make it as simple as "I'd like to save P10,000 this year." Having written goals helps us monitor progress and motivates us to take action.

2. Review your emergency fund balance. Financial emergencies can come in all shapes and sizes, and they usually happen when we least expect it, like sudden job loss, medical emergencies or death in the family. All these inflict emotional and financial burdens and having enough cash reserve will definitely help in weathering these financial storms. Ideally, you'd like to have at least eight months' worth of your expenses as the size of your emergency fund. Now time to check on your bank account to see if you are on track towards completing your emergency fund requirement.

3. Review your investment portfolio. Whether you manage your own investments or pay someone to manage them, a periodic review of your investment is necessary to gauge if your investment allocations are off balance. Things to consider reviewing during financial pit stop are:

– Stock positions hitting target prices. Do not allow yourself to forget that the market is cyclical; thus, good times also come to a momentary end. If your investment reaches its target prices, exercise prudence, learn when to get out and secure your gain.

– Size of cash reserve in your portfolio. I've seen a lot of investment portfolios containing two main asset classes in their buckets: stocks and bonds. While this is a good mix, I personally prefer to have a certain size of cash reserve in my investment portfolio. For one, cash is your financial safety net in case your current investments fall short and you need immediate liquidity. Second, investment opportunities like financial disasters can arrive anytime, and you would want to have enough cash reserve to take on a rewarding opportunity without flipping your current investment positions.

4. Accounting for life-changing events. Taking into account any life-changing events such as marriage, birth of a child, job promotion, salary raise, etc., during your financial pit stop is important to ensure you get a clear and whole picture of your financial standing.

Let's say you have been promoted in the first quarter of the year and given a substantial salary raise; the tendency is if you do not account for your additional surplus and incorporate it into your financial plan, you'll end up spending it on things that don't really matter to you. Any additional surplus from your cash flow may be used to fast-track you in achieving your financial goals.

The execution of a financial plan can be daunting and exhausting at some point. As human beings, our brains are trained to appreciate the short term rather than the long term, so it's crucial that we take a respite and do our financial pit stops not only to gauge where we are lacking but, most importantly, to monitor our progress and celebrate even the littlest accomplishment we have made with our financial lives.

Taking a financial pit stop is not just a momentary pause but an essential practice for anyone committed to achieving their financial aspirations. By reviewing your goals, assessing your emergency fund, evaluating your investment portfolio and accounting for life-changing events, you empower yourself to make informed decisions that can lead to greater financial stability and success.

Remember, progress is not always linear, and celebrating even the smallest victories can keep you motivated on your journey. Embrace these moments of reflection as opportunities to recalibrate and move forward with renewed focus and purpose. Here's to making the rest of the year your best financial chapter yet!

Jesi Bondoc is a Registered Financial Planner of RFP Philippines. To learn more about investment planning, join the 109th Registered Financial Planner program this January 2025 and inquire at info@rfp.ph.