How to Conduct Midyear Financial Checkup

How to Conduct Midyear Financial Checkup

While summer is more readily associated with baseball, barbecues and beach parties, the season also provides the ideal opportunity to take stock of your saving and spending with a midyear financial checkup. As of July 1, the first half of the year is the rearview mirror, so reviewing the current state of your finances will enable you to determine whether you are on track to meet your annual goals.

It also can prove invaluable come tax time, as the checkup can reveal whether you are earmarking enough money each month for state and federal taxes. Confirming this now – and making any needed adjustments – lessens the likelihood you’ll encounter any unwelcome tax season surprises. Here are a few steps you can take to help you accurately assess your midyear financial health.

Is That 401(k) OK?: Retirement will be here before you know it, so double check to ensure you’re doing all you can to make it a happy and prosperous one. Make sure you’re contributing enough to your 401(k) to collect any employer match to which you are entitled; after all, who wants to leave free money on the table? Your goal is to max out your tax-favored retirement plan – 401(k), 403(b), IRA – to build that nest egg and access any potential current-year tax deductions.

Cut the Debt: There is no escaping some debt, of course; think student loans and home mortgages. Credit cards, however, regularly come with double-digit interest rates that can wreak havoc on your budget and overall quality of life, particularly with the Fed prepared to raise rates at least one or two more times this year. The most effective debt-reduction strategy is to tackle the card with the highest rate first, while continuing to make minimum monthly payments on the others to avoid late fees. Once that first debt is eliminated, move on to the next highest rate card until you are debt-free. In the interim, make sure you don’t pay for any new purchases with plastic.

Saving for A Rainy Day: Mid-year is also an opportune moment to ensure your emergency fund is up to snuff. Financial professionals recommend having three to six months’ worth of living expenses set aside in a liquid, interest bearing account, such as a money market fund or savings account, for life’s little emergencies. If you don’t have an emergency fund, there’s no time like the present to start one.

Where Does the Money Go?: The National Foundation for Credit Counseling suggests consumers, regardless of their financial position, track their spending for at least 30 days annually to get a better sense of where their money is going and to establish better spending and saving habits. Write down every cent and put your spending into categories. Look for opportunities to liberate cash flow by cancelling memberships in clubs you don’t use, slashing your cable bill and swapping one trip per year for a staycation.

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At Harmony Communities, we feel strongly that each resident has a sense of home. That they come home from work and feel pride in their environment and in their place in the greater community. That families are comfortable raising children in our neighborhoods, and that couples and singles know that they belong to something bigger than their four walls. In other words, we seek to create harmony within each community, making our communities not just passable, but peaceful, safe, functional, and beautiful.