Summer is in full swing and your finances may be the last thing on your mind right now. But as we head into the second half of the year, it’s important to assess progress toward your financial goals and adjust your strategy if you aren’t on track. Here are four manageable tasks you can tackle to help you stay on track with your goals.
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.
Do you know how much you’re contributing to your retirement account? Can you be adding more to these accounts? Are you taking advantage of potential matches from your employer? These are all questions to consider when looking at your retirement contributions. As part of your financial checkup, set aside some time to review your retirement account(s) and determine if you can adjust your contributions.
If you haven’t made progress on building your emergency savings this year, now is the time to prioritize it. Your fund should equal three to six months’ worth of living expenses, which should be enough to cover bills if you lose your job and need to search for a new one. This money could also help cover unexpected but necessary expenses like a new transmission for your car. Without a fully-funded emergency savings account, it’s easy to turn to credit cards or retirement savings to cover large, unforeseen expenses.
Halfway through the year is also a good time to check your excess credit card balances to see where you stand. If you haven’t made the repayment progress you wanted to, it makes sense to go back to your budget and figure out how to allocate more toward your monthly payments. Next, decide how you’re going to use that budgeted money to pay off your credit card debt. The two methods most often cited by financial experts focus on putting as much money as possible toward one card until it’s paid off, while making the monthly minimum payments on the rest. These methods are known as the Debt Snowball & Debt Avalanche method.
Congratulations! You’ve just completed your mid-year financial checkup. Keep in mind, financial checkups can happen during anytime of the year. Financial wellness is a journey and everyone is on their own path towards financial success.