Mid-Year Money Checkup

Planning & Saving
on June 5, 2013

Most things in life require occasional maintenance and checkups, and just like it’s a good idea to visit the dentist a few times a year, the family budget and finances require a little attention periodically to make sure that decisions made at the beginning of the year are progressing as planned.

1. Check the credit report.

The midpoint of the year is a great time to get that free annual credit report. Every major credit reporting agency offers a single free credit report each year. Financial health often depends on the health of a credit report. Having problems on that report can lead to all sorts of issues if an individual wants to make a significant purchase of something like a home or vehicle.

2. Check out contributions at work.

The 401K plan might need some adjustments at the midpoint in the year, depending on someone’s income. There are maximum contribution levels in effect that might mean a family could max out a contribution by the midpoint in the year. It’s also important to bump those contributions up if it looks like the maximum contribution won’t be reached.

3. Check contribution levels for investments.

An IRA is one of the most valuable ways an individual can save up money for retirement. Most investment managers and financial analysts will suggest that it’s possible to get a retirement fund going with just contributions to an IRA account. If the beginning of the year didn’t offer any opportunities to start saving for such an account, it’s possible that by the midpoint of the year, it might be possible to start saving money.

4. Check savings goals progress.

Saving money is important, and at the beginning of each year it’s a good idea to write up some specific numbers regarding how much money needs to be in the savings account by the end of the year. At the mid-point of the year, it’s important to make sure that those savings goals are on track. After considering the amount of available disposable income, it might be worth bumping up the savings numbers if possible.

5. Make sure the W-4 is correct.

Getting a giant tax refund might seem like fun, but it’s just Uncle Sam’s way of having interest-free access to a taxpayer’s funds for most of the year. Taking a look at the W-2 to make sure the filing status and information are correct will allow a person or family to reduce the overpayment for the year, and make sure as much as possible remains in the paycheck each month.

6. Make sure the ledgers are up to date.

Most people don’t update their bank ledger frequently enough, and over time the balance might look incorrect by a few dollars because some purchase was forgotten along the way. Taking all the bank statements (and other financial statements, too) and updating funds levels is an essential mid-year project.

7. Refine the plan for the next six months.

After taking a squeegee to the family’s current financial picture, it’s vital to make any necessary changes to ensure the next six months are as profitable and smartly spent as possible. Refining the plan made at the beginning of the year with new numbers and figures entered into the ledger, helps to keep efforts for saving money on track.

Being smart with money takes practice and attention paid to the finances. This means a mid-year visit to the family’s financial picture should help to make sure that nothing slips by that creates a problem. Many people try to ignore their finances until a problem happens, and that’s the worst thing to do on a limited budget or in an era with a weak economy. Take the initiative to straighten out the budget in the middle of each year for a healthy financial future.

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