Mid-year check-in on your financial goals: Here’s how to stay on track
Regular attention to your personal finances is crucial in following your budget and saving money for emergencies, retirement and other life goals. The middle of the year is a good time to take stock of how things are going.
During a mid-year evaluation, you may find that the financial goals you’d set up previously are now harder to follow and need to be adjusted. You may also determine some changes are needed for your budget, investments, insurance coverage and debt repayment.
Here we’ll take a look at key things to look at mid-year to help you stay on track to meet your money goals in 2023.
Key financial wellness statistics
- More than one quarter (27 percent) of all U.S. adults with an investment/retirement account say they intend to invest more in the stock market this year. (Bankrate’s 2023 investment survey)
- The majority (82 percent) of people (who say concerns about money cause a negative impact on their mental health say economic factors are to blame) say economic factors play a role in causing a negative impact on their mental health. (Bankrate’s 2023 financial wellness survey)
- Nearly 1 in 5 (16 percent) of people recently reported being employed and seeking a new job, while 11 percent said they were unemployed and looking for a new job. (Bankrate’s 2023 job seekers survey)
- Nearly one quarter (23 percent) of people recently said their current highest priority was paying down debt, 32 percent said it was increasing emergency savings, and 34 percent said they want to focus on both at the same time. (Bankrate’s 2023 emergency savings survey)
What financial goals should you review?
One strategy to help save money is to decide what things you want to save for and then put a set amount of money toward those goals each month.
“Having saving goals is incredibly useful in a money-saving process because then you’ll have a concrete number you are working towards, which allows you to keep track of how you are doing against that goal, keeping you both accountable and motivated.”
— Barbara PetrangeloCertified financial planner and chair-elect at Life Happens
Taking a look at the financial goals you’ve previously set up can help you decide whether they need to be adjusted. This is a good idea if your budget has changed due to things like unplanned expenses, new debt or a change in income.
If you’d like some added help in reaching savings goals, consider working with a financial advisor. Getting matched with a financial advisor can help you make decisions regarding managing investments, as well as retirement and estate planning.
Need expert guidance when it comes to managing your investments or planning for retirement?
Bankrate’s AdvisorMatch can connect you to a CFP® professional to help you achieve your financial goals.
Your budget
An important part of your mid-year financial review is looking over your budget — and adjusting it as necessary. To do this, identify areas where you’re spending more or less than expected. Once you know those areas, you can choose whether to allocate more money to them or find ways to cut your spending.
If you don’t have three to six months’ worth of living expenses saved up in an emergency fund, create a line item in your budget to save toward this amount every month. Having money saved up for unplanned expenses helps ensure you won’t need to make major budget adjustments if you’re suddenly faced with a big car repair or medical bill.
Credit report and credit score
Part of your mid-year financial review should include checking your credit report. Be sure to dispute any errors you find on your credit report with one or more of the three major credit bureaus, all of which provide online options to do so.
Also check your credit score, and if it has fluctuated a good deal, determine the reason. Your score may have increased if you’ve consistently made payments on time, or it may have decreased if you’ve been late on payments.
Your credit utilization ratio is the amount of revolving credit you’re using divided by the total amount of credit available to you. Aim to keep this ratio at less than 30 percent, since this can boost your credit score.
Retirement savings
If your income has fluctuated this year, your capacity for retirement savings may have changed along with it. If you’ve gotten a raise, you likely have the ability to put away more money. Conversely, if you’re encountering unplanned expenses right now, consider freeing up some money by allocating a bit less for retirement.
Having a long-term, stable plan for retirement savings can give you a little more flexibility to increase or decrease your retirement savings, as needed.
Money tip: If your employer provides a 401(k) match, be sure to take advantage of this “free money” by contributing at least whatever percentage the employer will match.
A handy retirement calculator helps you create a retirement plan by letting you view your retirement savings balance and calculate your withdrawals for each year.
Taxes
Review your tax holdings mid-year to make sure you’re not over- or under-contributing. Keep in mind that life changes — such as getting married, having a child or getting a divorce — can have an effect on your taxes. Any changes to withholdings you make now could impact how much you receive or need to pay the IRS next year.
As part of your mid-year check-in, consider tax-loss harvesting, which involves selling investments in taxable accounts at a loss in order to claim a tax deduction when you file your taxes. This helps offset any capital gains you’ve earned during the tax year.
Bankrate’s tax calculators can help you determine factors such as your tax bracket, income credits and deductions.
Mid-year financial performance review adjustments
Budget: When reviewing your budget, adjust it to factor in any changes to your living expenses. If these have gone up, consider which of your expenses are necessary versus unnecessary.
Financial goals: Revisit these now that you’re halfway into the year, and determine if your priorities have changed. Now’s a good time to assess whether you’re able to save more or less toward each goal than you originally planned — and adjust your budget accordingly.
One goal you might decide to add to your list is holiday shopping. In a Bankrate 2022 holiday shopping survey, nearly one-third (27 percent) of adults said they would go into debt to pay for purchases. Starting now, saving even a small amount per month for gifts and other holiday expenses can save you stress and help you avoid going into debt this winter.
Debt: Speaking of debt, now’s a good time to evaluate your credit card and loan payment amounts. Consider consolidating your debts, which may reduce what you owe each month. Balance transfer credit cards often come with a low (or 0 percent) introductory annual percentage rate (APR).
Emergency fund: Be sure to rebuild your emergency fund if it’s been depleted this year due to expenses. Ultimately, this fund should be able to cover unplanned expenses that come up, as well as several months’ worth of living expenses.
Additional financial planning resources
As Americans continue to feel the effects of high inflation and economic uncertainty, only around half (48 percent) have enough money saved up to cover three months’ worth of expenses, Bankrate’s emergency savings survey found.
A mid-year check-in can help you stay on track with your financial plan and grow your savings, and many savers would also benefit from smaller check-ins every month as well.
Paying close attention to your financial goals through check-ins helps break down your larger objectives into smaller, more manageable steps. Plus, you’ll feel a sense of accomplishment for staying on track and making the necessary adjustments. Bankrate’s savings goals calculator can come in handy in setting and adjusting your goals.
