Yahoo Finance Your 2024 Midyear Financial Check-In
Many people set financial resolutions at the beginning of the year, only to forget about them altogether until the next January comes around.
This is a big no-no, according to experts. Doing a midyear check-in is crucial for staying on target.
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“At midyear, it’s critical to perform a detailed financial check-in to optimize your year’s financial outcome,” said Ben Klesinger, co-founder and CEO of Reliant Insurance Group and Helping Hand Financial.
Below are some steps to take during your 2024 midyear financial check-in.
Reassess Your Budget and Spending Patterns
“I always begin by revisiting my budget to see how my spending aligns with my initial plan,” said Justin Godur, finance advisor and founder of Capital Max. “Look for areas where you might be overspending and make necessary adjustments. For instance, if you’ve noticed higher-than-expected expenses in dining out, consider reallocating funds from less critical areas.”
The goal, he said, is to keep your financial plan flexible yet disciplined.
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Examine Your Debt and Savings Progress
“Review your progress on debt repayment and savings goals,” Godur said. “Are you ahead or behind schedule? If you find that your credit card debt is increasing, it’s a red flag that your spending habits need to be adjusted.”
Michael Ashley, finance expert and founder of Richiest, said it’s necessary to assess your progress on debt management.
“Review your current debt levels, including mortgages, loans and credit card balances,” he said. “Have you made significant progress in reducing your debt? With interest rates fluctuating, it might be beneficial to refinance or renegotiate the terms of your debts to lower your costs.”
He also advises paying close attention to high-interest, non-deductible debts, as these can quickly erode your financial health.
“If your debt levels haven’t decreased or have increased unexpectedly, that’s a red flag indicating a need for more disciplined spending or a revised repayment strategy,” Ashley said. “On the flip side, ensure you’re meeting your savings targets, whether for an emergency fund, retirement or other goals.
“If you’re falling short, consider automating your savings to stay consistent.”
Evaluate Your Investment Portfolio
“Take a close look at your investment portfolio to ensure it still aligns with your risk tolerance and financial objectives,” Godur said. “Market conditions can change, and so should your strategy.
“For example, if you initially allocated 70% to stocks but now feel uneasy about market volatility, it might be wise to rebalance towards more stable assets. Regularly reviewing your portfolio helps mitigate risks and optimize returns. By focusing on these three areas during your midyear check-in, you can identify potential red flags and make informed adjustments.”
Staying proactive and adaptable is key to maintaining financial health and achieving your long-term goals, Godur added.
Ashley said midyear is the perfect time to scrutinize the performance of your stocks, bonds and other investments against market benchmarks.
“Are your investments performing as expected? If certain assets are underperforming, it might be time to rebalance your portfolio to align with your risk tolerance and long-term goals.
“Look for red flags such as consistently underperforming funds or an overly concentrated portfolio, which can increase your risk exposure. You might also want to consider diversifying or consolidating gains by divesting from these assets and exploring new investment opportunities.”
Review Your Insurance Coverage
“Many might overlook this, but I often see clients underinsured for their actual needs, especially those with high net worth or businesses requiring specific coverages,” Klesinger said. “Ensure your policies, like workers’ compensation, reflect accurate payroll data and claim statuses, as unresolved claims can inflate your Experience Modification Rate (EMR) unnaturally.
“For instance, better-suited liability coverage for secondary homes or an endorsement for custom farming activities can provide essential financial protection.”
Scrutinize Your Retirement Accounts
“IRAs and 401(k)s offer tax advantages that should be maximized,” Klesinger said. “In 2018, a client augmented their retirement fund’s efficiency by re-evaluating their contribution levels to Roth vs. traditional IRAs based on their current and projected tax situations. This strategic move used the tax-free withdrawal benefits of a Roth IRA to their advantage, aligning with their long-term financial objectives.
“Conducting a thorough midyear financial check-in using these detailed, actionable steps can significantly improve financial health and preparedness for the year’s second half.”
Plan for the Rest of the Year
“Revisit any plans for major expenditures or investments, such as vacations, home upgrades or other significant purchases,” Ashley said. “Ensure these align with your long-term wealth preservation and lifestyle goals.
“If financing is required, secure it in advance to avoid last-minute stress. Watch out for overcommitting financially without a clear plan, as this can derail your financial stability.”
Explore Opportunities for Charitable Giving
“Charitable contributions not only support causes you care about but can also provide substantial tax benefits,” Ashley said. “Donating appreciated shares, for example, can help eliminate capital gains taxes and reduce your taxable income. Ensure your charitable giving fits into your broader financial strategy, and don’t overlook the potential tax advantages.”
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This article originally appeared on GOBankingRates.com: Your 2024 Midyear Financial Check-In
