How is your money doing? Is your money doing what it should so far this year? The possibly unwelcome news is that the year is half over and you may be behind on your annual financial goals. But the great news is that there are still several months to review where you are and make course corrections to progress on achieving your goals. The midpoint of the year is a good time to look at where your finances are relative to goals and budget and decide whether it’s also time to make a few needed changes with your money before year-end, including modifying how you use your resources and where they are located.
A mid-year money diagnostic examination shouldn’t be painful, but it may uncover some financial habits that need some amount of adjusting this year and for the future. Unlike some medical checkups, when examining your money you’ll need to do some advance preparation. To get ready for your checkup, have your most recent financial statements in hand or online, open any spreadsheets, digital documents or other software used to manage money, grab a calculator, and relax, because a semi-annual checkup is good for you and can help keep you fiscally healthy. Here are a few things to consider when looking at your finances and determining if you need any big changes or just tweaks for the second half of this year.
A lot of key questions—and some ideas—for a financial health checkup this year
- How are you doing against your annual budget—below, above, even? At the middle of year are you where you want to be with your money? Life is unpredictable, and that means that a planned budget can easily encounter an unexpected financial surprise. Look at your budget and decide what needs more money and what needs less. Did you get a windfall you could invest? What about a job bonus? Are you still paying off debt from the holidays? How is your emergency fund holding out? Still adding to the new car fund? Have you had an unexpected expense that has disrupted your cash flow or savings for part—or all—of the year?
- Investigate your assets to determine their year-to-date and historical performance. Whether you have Individual Retirement Accounts (IRA), savings accounts, money market accounts, certificates of deposit (CD), an employer-sponsored 401(k) retirement account or some other type of savings or investment vehicle, it’s important to check its performance regularly. Look at what you have and evaluate the performance against your needs. Do you need to change how much, how often, or into what sort of account you contribute money?
- How’s your debt amount—credit card, mortgage, student or other loans? Is it manageable? Do you have student loans, a mortgage, a personal loan, credit card balance, or other type of debt you’re carrying? Are you managing it responsibly without doing anything to harm your credit score or hindering your ability to plan for the future? Can you pay it off entirely, accelerate the payoff, or at least try to lower the interest rate? Have you considered how a personal loan could help reduce debt and provide a better interest rate for managing the debt? Have you talked to someone at your bank or credit union about how to handle your debt more effectively?
- Do you have any unnecessary spending that can be cut back or even totally eliminated? Are there any food, travel, hobbies, streaming music and video services, clothes, gym or club membership, internet, television or utility service that can be eliminated or moderated to lower monthly or annual expenses without making too much of a sacrifice for your lifestyle? Can you cut back on carrying out that daily coffee shop tall mocha latte? What about eating out less or getting fewer takeout meals? Is there a cheaper monthly or annual mobile phone plan that still meets your essential service needs for calls, texts and data? Could you be doing more cost comparison shopping to get exactly what you want and at the best price? Are you taking advantage of store sales, both online and in physical stores?
- Are you saving as much as you can for emergencies while planning for future needs? Finance professionals have often recommended saving the equivalent of at least three to six months' worth of living expenses in an easily accessible emergency fund. Is your emergency fund fully funded, does it need work, or have you not started one yet? Do you need to plan more for retirement? Or do you need to save more for a major purchase, such as a new vehicle, a home or kitchen appliance? If you cut back on the unessential spending mentioned above, would that free more money for essential goods and services? Are you balancing cost vs. need with your life insurance coverage to protect your loved ones? in other words, have you considered what life insurances costs annually compared with the benefits it could provide for your family or friends if it’s needed?
- Should you consider possible tax-savings strategies for this year—such as contributing to a potentially tax-deductible IRA? If you contribute to an appropriate IRA before the tax filing deadline, you may be able to save on some taxes for this year. Depending on the IRA you choose, taxes on your contributions may be deferred until you begin withdrawals, usually in retirement. If you think you’ll be in a higher tax bracket by retirement, you might choose a different type of IRA that allows you to pay taxes on the contributions you make now in order to avoid higher taxes later.
Looking for more information on managing money during any time of the year?
For more information that may help you manage your costs and finances—both throughout the year and at every stage of your life—look into the free Delta Community Financial Education Center webinars on a range of practical, “how to” topics that could potentially help save you money and enable you to better manage your income, financial assets and life. Please visit the Financial Education Center's Events & Seminars page to review and register for its monthly workshops.
The Credit Union’s blog has more information that could be educational and helpful:
BALANCE™ in life includes how you manage your money
BALANCE™ is a financial education and counseling organization that offers free services to Delta Community members. Some of its services include credit report reviews, debt management, and information on budgeting, money management and home buying.
Visit the BALANCE™ website to learn about their education and assistance programs. Members can also speak with certified credit and housing counselors to get personalized guidance.
Want to connect with a Financial Coach about your specific situation? Chat online e-mail, or call 1-888-456-2227 to speak with a Financial Coach today.
Note that the services offered through BALANCE™ are separate and distinct from any business conducted with Delta Community and are not guaranteed by, nor are they obligations of, the Credit Union.
