Making the Most of Your Mid-Year Financial Checkup

7 min read
Blog-Mid-Year-Financial-Checkup 2021
  • Checking in on your financial plan mid-year helps you reflect on the progress you've already made, and it's also a good opportunity to make any changes and adjustments necessary to ensure you reach the financial goals you set out to achieve. 

  • From rethinking your budget and debt repayment strategy to reviewing your credit reports and revisiting your personal goals, a mid-year check in can help you map out the best plan for the remaining months of the year.

  • Building your emergency fund, monitoring your spending, and renegotiating bills are some of the ways you can keep up the momentum and your personal finances on track.

Without regular attention and ongoing maintenance, financial plans tend to be forgotten or simply fall apart. Reviewing the plan you made six months ago not only allows you to reflect on the progress you've made, it's an organizational opportunity to ensure you stay on track by adjusting your saving, budgeting, and spending as needed—before it's too late.  

Why Mid-Year Financial Checkups Work

Setting your financial goals and developing a budget at the beginning of the year helps you focus on what you want to achieve in the year ahead. Life events like the birth of child, a job change, or economic fluctuations can trigger tax and other financial implications that require immediate attention. 

Checking in on your financial plan mid-year can help you reflect on the progress you've already made, but also be an opportune time to make any changes and adjustments necessary to ensure you reach the financial goals you set out to achieve. It is also a great time to reevaluate your overall plans. 

Maybe your savings priorities changed, you got a new job, or your expenses are more than you anticipated. Regardless of where you are mid-year, pausing midway through the year to review your financial picture can help you map out the best plan for the remaining months ahead.

8 Ideas for Your Mid-Year Financial Review

1. Rethink your budget.

Your budget should be a top priority for any financial checkup. If you created a new budget at the beginning of the year, now is the perfect time to reflect on how well that budget is working for you. Have you made progress toward your goals? If not, consider cutting spending and building savings to help build momentum for the remaining months of the year.  

This is also a good time to decide if your budget is really working for you. If you created a detailed budget that you’re having a difficult time sticking with, consider shifting to a more realistic (flexible) spending plan. Remember, there's no one right way to manage your money.  

2. Look at your credit report.

Checking your credit report throughout the year helps you make sure you’re in good shape should you need to apply for new credit. But even if you’re not actively looking to borrow money right now, checking your credit report allows you to make sure you’re not a victim of identity theft or fraud. It’s also the first step in correcting any information that may be inaccurate. Visit AnnualCreditReport.com to obtain free copies of your reports from all three national credit bureaus (Equifax, Experian, TransUnion).

3. Renegotiate your lease.

Over the past two years, rent prices have generally increased by more than 15% nationally. The national median rental now stands at $2,029. If your lease is up for renewal soon, it may be time to re-evaluate your lease agreement to ensure you’re getting your money’s worth and paying for only what you need. Usually, landlords want to keep good tenants and so the good news is you may not have to move to find a better deal. You can start by looking at similar nearby rental rates to get a sense of the market and determine a price that seems fair and manageable. About two to three months before your lease expires, approach your landlord to ask if they would be willing to negotiate on the rent. Offering them something in return—such as signing a longer lease or paying the last month’s rent upfront—may help swing things in your favor. Timing often matters when it comes to negotiating your rent so it’s best to know whether you’re in a buyer’s market or your landlord plans to sell the property soon.

4. Check your health benefits.

If you’ve experienced a qualifying life event or your financial situation has changed, you may not have to wait for the open enrollment period (November through January, typically) to buy a new health plan or makes changes to an existing plan. While it varies by state, some common ways you can qualify for a special enrollment window include:

  • Loss of employer-sponsored coverage, aging out of your parent’s health plan, becoming ineligible for student health coverage

  • Relocation

  • Marriage or divorce

  • Birth or adoption of a child

  • Low-income families

  • Returning from active-duty military service

  • Gaining citizenship or permanent legal residency

5. Reevaluate your retirement accounts.

When was the last time you reviewed your 401(k) plan and/or IRAs? Not only does making the maximum allowable contribution using pre-tax dollars add up significantly over time, if you're not taking advantage of a company 401(k) match, that's money you're leaving on the table. 

Mid-year is also a good time to look at your investment strategy. How have market fluctuations affected your portfolio? Are your investment choices holding up? This isn’t something you have to do alone. Many companies offer assistance with retirement planning, or you can reach out to a certified financial planner to help you develop or make any needed adjustments.  

6. Anticipate tax implications.

Assessing your taxes halfway through the year can help you reduce your tax burden and mitigate any potential tax consequences. It’s always a good idea to review your tax withholdings mid-year to ensure you’re not over- or under-contributing and adjust accordingly. Also, think about any major life changes, such as marriage, divorce, the birth or adoption of a child, or starting a business, and how it may affect your taxes at the end of the year.

7. Reexamine your debt strategy.

If you’re having trouble finding the motivation to repay your debt, consider the debt snowball method. With this strategy, you pay as much as you can each month toward your smallest debt while paying only the minimum due on your other debts. When the first debt is paid off, you move on to the next smallest, and so on until you work your way up until all your debt is paid off.  

If you’re motivated to pay off your debt but feeling overwhelmed by interest rates and overall costs, the debt avalanche method could be the strategy you need. It works by paying your debts with the highest interest rates first, paying only the minimum on your other debts, then moving on to the next highest, and so on. This method requires more discipline, but it could save you more money in the long run.  

8. Revisit your personal financial goals.

If over the past year you’ve had to delay plans that would help you move forward financially, such as buying a new home, landing a new job, relocating to a more affordable area, or retiring early, you’re not alone. Though disappointing, financial setbacks are usually good chances to revisit how to bring about true financial change.

Looking back over the past several years, many of us have had time to assess what’s next as individuals and a society. We have a fresh opportunity to envision what our future could look like outside the box of what makes a ”good” life. When we go through periods of disruption, loss, or major change, it’s an excellent time to rewrite the rules for ourselves and build a stronger, more resilient and sustainable way of living that enables even greater financial security for you and your family.

Taking Action After Your Mid-Year Financial Checkup

A mid-year financial checkup should give you a clear idea of what actions you need to take to stay on track for your goals. Here are some tried-and-true recommendations to help you keep moving forward through the remainder of the year. 

1. Build or maintain your emergency fund.

Putting even a small amount aside for emergencies can help you recover more quickly from financial setbacks and keep your finances on track. If you don’t already have three to six months of living expenses set aside, recommit to allocating money each month to rebuild or contribute even more to your emergency fund. It might take a while, but it’s worth it. Plus, stashing the money into a high-yield savings account can help your money grow faster compared to a regular checking or savings account.

2. Monitor your spending.

Go through your bank and credit card statements from the past couple of months and make a list of all expenses you can either cut back on or eliminate altogether. Don’t stop at just the shopping and dining out expenses. Instead, take a close look at all your monthly subscriptions, memberships or similar expenses. Chances are there are at least a few services you’re paying for that you’ve forgotten about or no longer really need.  

3. Get a break on your insurance rates.

Many insurance carriers offer discounts to loyal customers with safe driving records. If you’ve been paying the same rate for years, consider contacting your provider about potential discounts. It can also pay to shop around. Compare rates against a few insurance companies to ensure you’re still getting the best deal.  

4. Get cozy with your credit score. 

A higher credit score can generally help you access more favorable interest rates on credit cards, auto insurance premiums, as well as higher borrowing limits and terms on personal loans. If your score dropped since the beginning of the year, don’t be discouraged. Instead, find out why your credit score dropped, focus on making on-time payments across all your credit accounts, and work on paying down debt. These are major factors credit reporting companies use in determining your credit score.  

5. Renegotiate cable and internet bills.

If you want to lower your cable and internet bills, try renegotiating with your current provider before switching over to another company. You might be surprised by how much you can knock off your bill just by asking. A quick phone call could help you uncover a special deal you didn’t know about, or your provider might be willing to offer you a discount to keep you from leaving.  

6. Consider your loan options.

If you’ve improved your credit score over the past year and you’re looking to pay down high-interest debt, consider a debt consolidation loan. A debt consolidation loan is a form of debt refinancing that combines multiple balances from credit cards and other high-interest loans into a single loan with a fixed rate and term. It can help you save money by reducing your interest rate or make it easier to pay off debt faster. A debt consolidation loan may also lower your monthly payment. Shop around for the best APR and loan terms by checking your rate with several different lenders before making a decision. And avoid the temptation to accumulate new debt while you’re paying off your debt consolidation loan.

The Bottom Line

Examining your finances midway through the year is a good habit to get into. A mid-year financial checkup allows you to assess how well you’re progressing toward your annual financial goals and make adjustments along the way—like retooling your budget, cash flow, spending, living expenses, and health benefits.

These checkups, combined with everyday financial health practices, can help you keep your personal finances on track, no matter what life may throw your way. 

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