How to perform a mid-year financial check-up

As we get further into the year, it's easy to get caught up in day-to-day life and perhaps forget about the financial goals we set back in January. Staying on top of finances is important year-round, not just at the beginning of the year. Conducting a mid-year financial check-up can provide a chance to complete a personal finance review, assess progress, and determine if any adjustments might be needed. This fresh perspective could help you stay focused and make sure you’re on the right path toward achieving your financial goals.

What to look for during a personal financial review

A personal financial review is an essential part of maintaining financial health and can provide an opportunity to assess progress and update goals or the budget to help keep things on track. Here are some key areas to focus on when reviewing finances:

Credit score

A credit score is an indicator of in financial health, influencing loan approvals, interest rates, and access to various financial opportunities. Regularly monitoring a credit score may help identify any errors and ensures your score stays in good standing.

Outstanding debt

A financial review should include an evaluation of any outstanding debts—credit card balances, student loans, mortgages, or personal loans. It's important to track progress in paying down debts and see if you’re on target or need to make adjustments that could keep the repayment plan moving in the right direction.

Budget

Reviewing the budget assures it still reflects current income and spending habits. Track any changes in lifestyle or expenses and check that the budget is balanced without any areas of overspending.

Retirement accounts and investments

Reviewing retirement accounts such as 401(k)s or IRAs may help ensure that contributions are sufficient for long-term retirement goals. Additionally, other investments like stocks, bonds, and mutual funds should be evaluated for performance to confirm that they still align with overall financial strategies.

Emergency fund

An emergency fund is a safety net for unexpected events such as medical expenses or job loss. Assessing whether the emergency fund is adequate (typically 3-6 months of living expenses) is important to maintain financial stability in uncertain times.

Savings goals

Take a look at personal savings goals—whether it’s for a down payment on a home, vacation fund, or retirement. See if the budget could be rearranged to free up more money for these objectives. Also determine if the goals set at the beginning of the year are still relevant and achievable based on your current financial position.

Life changes

Major life events, such as changes in marital status, having children, purchasing a home, or significant financial commitments, should be factored into ongoing financial plans. These changes often may require adjustments to budgeting, saving, and investment strategies to account for new financial priorities.

Importance of ongoing financial planning during the year

Financial planning isn’t something you set and forget. As life changes, so might financial goals. Things like shifts in income, unexpected expenses, or changing priorities can all affect a financial plan. That’s why it’s important to regularly check in and make modifications as needed.

A financial check-up midway through the year can help identify areas where progress may be lagging or areas where performance is strong. This insight could help you reevaluate your savings goals and budget and determine if tweaks are needed to keep a financial plan aligned with current objectives for the rest of the year.

Tips to get back on track financially to meet personal goals

Falling behind on financial goals is common, so it’s important to remember that it’s never too late to recover or make improvements. Financial plans may need to be readjusted, and with the right steps, progress toward long-term goals can still be achieved. Here are some helpful steps to getting back on track toward financial and budgeting goals:

Pay off debt

To focus on paying down debt, prioritize high-interest debts first. Strategies like the debt snowball or debt avalanche can help you stay organized and motivated while tackling outstanding balances.

Build back up an emergency fund

Having an emergency fund is essential for financial security. If it has been depleted, take steps to rebuild this reserve to help cover living expenses or create a cushion in case of unexpected events.

Audit expenses

Take a close look at where money is going. Reviewing expenses can reveal areas where there may be overspending or where small adjustments could add up over time.

Set new goals if necessary

If original financial goals no longer align with current circumstances, it may be time to set new, more realistic goals. A personal financial review can help clarify where you stand and if new targets are needed moving forward.

Plan for the future

It’s never too early to start planning for future financial needs, whether that’s retirement, a major purchase, or other long-term goals. Developing a strategy now can ensure that the path toward these goals is well-defined and achievable.

How to stick to a budget

Mid-year is an ideal time to revisit and potentially get back on track with a budget. By this point, you are likely to have a better understanding of spending habits and have had the opportunity to set more realistic expectations for the rest of the year. This can also be a great time to consider automating expenses with autopay to simplify recurring bills and reduce the chances of missed payments. A new budgeting tool that better aligns with financial needs could help individuals stay organized and focused on their financial goals.

Along with meeting short-term goals, proper personal finance and budgeting practices are key to achieving long-term financial objectives. Now is the perfect time to start prioritizing savings to enhance financial security in the future. Consulting a financial professional can provide valuable guidance in all areas of money management and help you create a tailored strategy for meeting immediate and long-term financial goals. This may include exploring retirement savings options, evaluating annuities as a stable income source for retirement, and reviewing life insurance policies to ensure adequate coverage for the future.

Conducting a mid-year financial check-up is a great way to take a step back, see how things are going, and make sure both short-term and long-term goals are still on track. It’s a simple way to stay focused, make any necessary tweaks, and set yourself up for success for the rest of the year.

The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.

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