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Mid-Year Financial Check-Up

It is amazing to think that we are already half way through 2023.While you may be caught up in the hectic summer schedule, it’s crucial to pause and perform a mid-year financial check-up. Just like a regular health check-up ensures your physical well-being, a financial check-up helps you assess your financial situation and understand what adjustments need to be made over the next 6-months. In this blog post, we’ll explore why it’s important to perform a mid-year financial check-up and highlight key areas to review. So, let’s dive in!

First, download these FREE RESOURCES to assist in reviewing your finances



Investment Allocation: Maintain Prudent Balance

☑ Take stock of your investment portfolio: Review your investment accounts, including retirement accounts, brokerage accounts, Health Savings Accounts and any other investment accounts you have. Review your investments to understand what you own, why you own it and whether you still want to be invested in it moving forward.
☑ Assess your risk tolerance: Determine if your investment allocation aligns with your risk tolerance. Has your risk tolerance changed over time due to shifting priorities? While it is not prudent to try to time the market or adjust your allocation due to current conditions, you may find that your risk tolerance has changed due to personal reasons.
☑ Diversify your investments: Ensure that you have a diversified investment portfolio. Diversification helps spread risk and protects against potential losses in any particular investment. Evaluate if your investments are well-diversified across different asset classes, sectors and geographic regions.

Saving Progress: Are You on Track?

☑ Track your saving goals: Revisit your financial goals and assess your progress. Are you on track to meet your short-term and long-term saving targets? Analyze your spending patterns and identify areas where you can cut back to save more.
☑ Evaluate your emergency fund: Check the status of your emergency fund. Aim to have at least three to six months’ worth of living expenses saved in case of unexpected events. If you haven’t reached this milestone, make a plan to boost your emergency savings. The amount of emergency funds you maintain will be partly dependent on your personal comfort level as well as your income level and job security.
☑ Automate savings: Set up automatic transfers from your checking account to your savings or investment accounts. This simple step can make a significant difference in building your savings over time. Review your automated savings plan and adjust the amount if needed.

Cash Flow: Balancing Income and Expenses

☑ Evaluate your budget: Review your monthly income and expenses. Are you sticking to your budget or overspending in certain areas? Identify any unnecessary expenses and find ways to reallocate those funds toward your financial goals.
☑ Reduce debt burden: If you have outstanding debt, such as credit card debt or student loans, evaluate your progress in paying it off. Consider consolidating or refinancing your loans to lower interest rates and accelerate your debt repayment plan. Don’t forget, federal student loan payments resume in October, which may have a significant impact on your monthly expenses.
☑ Assess insurance coverage: Check your insurance policies, including health, life, home, and auto insurance. Ensure your coverage is adequate and up to date. Life circumstances can change, and your insurance needs may evolve as well. Insurance premiums have also been on the rise, so perhaps its time to shop around and find the best possible rates.

Maxing Out Retirement Contributions: Investing in Your Future

☑ Review retirement contributions: Examine your retirement savings contributions, such as 401(k), IRA, or pension plans. Are you maximizing the available tax-advantaged contribution limits? If not, consider increasing your contributions to take full advantage of the tax benefits and secure your financial future. Don’t forget, you can save in an employer based retirement plan as well as a personal IRA. Brokerage accounts are also great for saving any additional money above retirement account limits.
☑ Explore catch-up contributions: If you’re 50 years or older, you may be eligible for catch-up contributions to retirement accounts. Take advantage of these additional contribution limits to accelerate your retirement savings.
☑ Don’t forego any employer match: If you max out your 401(k) contributions before the end of the year then you may be missing out on a portion of your employer matching. Review the details of how your employer matches based on your contributions and make sure you setup your contributions to get every dollar available to you.

Final Thoughts

Performing a mid-year financial check-up is an essential step to maintain your financial well-being. By reviewing your investment allocation, saving progress, cash flow adjustments, and retirement contributions, you can make necessary adjustments to stay on track and achieve your financial goals. Remember, your financial situation is dynamic, and regular check-ups ensure you adapt to any changes and make informed decisions. So, take some time to assess your finances and secure a brighter future for yourself and your loved ones.