It’s that time of year again! Tax time is over and we’re midway through the year. Now is a great time to check in on your financial planning and goals. Reassess where you stand and how close you are to reaching your goals. This is a great time to make changes or pat yourself on the back for a job well-done because you’re on track. Here’s how to check in with yourself mid-year.
1. Has Anything Changed in Your Personal Life?
Look at your personal life and determine if anything major changed. Did you get married or divorced? Did your child start or graduate college? Did any children move out and you no longer have to cover their expenses? Noting the changes made in your personal life can help you make appropriate changes to your budget, taxes, and retirement savings. It’s also a good time to revisit your beneficiary designations to see if you need any changes.
2. Check in on Your Financial Goals
What goals did you set for yourself and where you do you stand? Have you met any goals you can check off your list? If you’re far off from reaching a goal and feel unmotivated, reassess the goal. Is it still something you want? If it is, figure out what must change so you can reach your goal within your timeframe.
Do you Have an Emergency Fund?
If you used your emergency fund in the last year, budget to replenish it. If you don’t have an emergency fund, now’s the time to create one. Save the money in a high yield savings account that’s separate from your regular funds so you don’t spend it.
Do you Have a Lot of Debt?
If part of your goals were to pay off debt, assess where you stand. If you got into debt this year, create a debt payoff plan. High interest debt is an opportunity cost to any other investments. No investment will beat the interest you pay on debt. Focus on paying your debt off this year making more than the minimum required payment to pay it off fast.
Check on your Retirement Plans
No financial planning tasks are complete without checking on your retirement plans. Assess your investment performance and your asset allocation. Do you need to reallocate your investments to stay on track to meet your retirement goals? This is a great time to assess your need for a Roth or traditional retirement account too. A Roth account is after-tax, so your earnings grow tax-free. Your withdrawals are tax-free too. A traditional retirement account gives the tax break now, but you pay taxes when you withdraw the funds.
Final Thoughts
If you aren’t sure where to start with your mid-year check in, let the financial planning experts at JMV Financial Services help. We’ll guide you in the areas that could use some help or help you see factors you didn’t realize. Together we can ensure your big financial picture looks how you want it to, helping you to reach your financial goals.