Here’s an Essential 5-Point Mid-Year Financial Checkup

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It’s a good time to review your finances. Read on for some key areas to look at. 

It’s hard to believe that we’re halfway through 2023, but alas, here we are. So far, it’s been an interesting few months. We’ve gone through a banking industry meltdown and seen inflation persist. And we’ve certainly heard our fair share of recession warnings.

You may have different goals you’re trying to meet in 2023, despite the challenging factors above. So now’s a good time to review them all. Here are some specific moves you may want to make.

1. Revisit your budget

If you’re someone who follows a budget, you may be in the habit of setting up a new one at the start of each year. Now’s the time to make sure your budget is realistic.

It may be that some bills of yours have climbed since the start of 2023. Or maybe you got a new job this year that resulted in a new salary.

Comb through your expenses to make sure your budget still works. And also, examine your expenses and make sure they’re still all worth paying for. You may, for example, want to dump a streaming service if you can’t remember the last time you used it.

2. Check your emergency fund balance

It’s important to have money set aside in your savings account in case an unplanned expense pops up. Recent data from SecureSave found that 67% of Americans could not cover a $400 expense with money from savings. If you’re in a similar boat, it’s important to try to ramp up.

But even if you started the year with a more robust emergency fund, it may be that you had to pull from your cash reserves to do things like pay for home or car repairs. Take a look at your emergency savings balance and see if it will still suffice in covering three months of essential bills. If not, you may want to focus on boosting your cash reserves between now and December.

3. Give your portfolio a thorough review

If you’re investing for your future, whether in a taxable brokerage account or an IRA, it’s important to have a nice, balanced mix of stocks and other assets. Take a look at your portfolio to make sure it’s as diversified as you’d like it to be.

Over time, the value of different assets you own can change so that you may end up less diversified than expected. If that’s the case, do some rebalancing. That could mean selling stocks that are part of sectors you’re too heavily invested in and buying stocks in sectors that aren’t well-represented in your portfolio. You can also look at buying S&P 500 ETFs as a means of diversifying.

4. Do some tax planning

Did you owe the IRS a lot of money this past April? If so, it may be time to start strategizing so you end up with a smaller bill next year.

Or maybe you got a giant tax refund this past spring. That might seem like a good thing in theory, but it means you parted with extra money in 2022 for no reason. If that’s the case, talk to your accountant about adjusting your tax withholding.

5. See how you’re doing with your 2023 goals

Maybe one of your objectives this year is to get closer to being able to buy a home. Or maybe you’re hoping to pay off your car or shed a credit card balance.

Now’s a good time to see how much progress you’ve made toward your goals so far. If you’re not happy in that regard, you may want to look at making changes, like cutting back on some expenses or picking up a side hustle to boost your income.

The midpoint of the year is a great time to review your financial picture. Make these moves sooner rather than later so you can close out the year happy with where your finances stand.

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