Mid-year checkpoint for your finances

With tax season behind us and holiday shopping months away, the summer is often a time when people relax in regard to their finances. While this is a good thing, getting too relaxed with your finances might mean you start to lose track of how you’re managing your money and how much progress you've made on your financial goals. The middle of the year is a great time to check in on your finances and make sure everything is in order for the rest of the year.

The importance of a mid-year evaluation of your finances

When it comes to your finances, checkups are important. Just like going to the doctor, sometimes you don’t know if something is wrong with your finances until you evaluate them and find out. Checking in on your finances is the only way to see if what you are doing for the first half of the year is working. It’s worth it because if you need to adjust your spending, saving or investing strategy, you can do it now instead of finding out later.

A mid-year checkpoint of your finances can include checking in on your retirement contributions, reviewing your investment portfolio, looking at your debt and any other financial topics that you are focusing on.

Steps for your financial checkup

To evaluate your finances, consider reviewing the following areas:

Check your progress on any goals. Are you working toward any financial goals like saving for a vacation or a down payment or a new car? Check in and see how close you are to hitting those goals. If you wanted to save $3,000 for a vacation this year, have you saved at least $1,500? If you aren’t going to hit your goals, you can try adjusting your approach, or adjusting your goals, depending on what works for you financially.

Review your retirement contributions. It’s a good idea to check on your retirement accounts and contributions in June. While most people just know that a certain amount of their money is automatically going into their retirement account and don’t check on them often because of this, it’s a good idea to see if your contributions are hitting your retirement targets. Can you contribute more? Should you reduce your contributions? Is what you’re contributing enough for your retirement goals?

Take a closer look at your portfolio. Aside from your retirement contributions, your entire portfolio could probably use a closer look aside from the casual check-ins you might make throughout the year. It’s a good idea to do this with your financial advisor because they will be able to take a deep look and provide the most insight on how to recalibrate your strategy.

Evaluate your debt. If you’re working on paying off debt, you should evaluate how much you have paid off by the middle of the year. You might be making consistent payments toward your debt, but it’s important to actually track how those payments are reducing your overall debt burden. If your interest rates are high, you might not be making as much progress as you think, or you might find you’re further along in paying down your debt than you thought. Either way, you should check on your progress to see what you’re working with halfway through the year.

Keep building your emergency fund. If you don’t have an emergency fund, you should start saving for one. An emergency fund is a savings account with enough money in it to provide for three to six months without any income. If you’re working on building up your emergency fund, review how it’s coming along.

The bottom line

Regardless of how your mid-year checkpoint for your finances goes, you’ve still got the second half of the year to go. If you’re not in the place you want to be, you can adjust your strategy. But if you’re doing better than you thought, now you know that what you’re doing is working and you can keep it up. Either way, knowing where you’re at is better than being in the dark, and as always, a J.P. Morgan advisor is available for assistance if you need help evaluating your financial goals.

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