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The Importance of a Mid-Year Financial Check-In

The Importance of a Mid-Year Financial Check-In

June 07, 2024

As we reach the midpoint of the year, it’s the perfect time to pause and reflect on your financial health. Just like regular health check-ups, a mid-year financial review ensures that you’re on track with your goals and can make any necessary adjustments. At Rowhouse Financial Partners, we believe thoughtful and responsive planning is essential, which means checking in throughout the year. Here’s how you can make the most of your mid-year financial check-in. 

Review Your Financial Goals 

The only constant in life is that it’s full of changes, and your financial goals should reflect your evolving needs. Whether it’s your children’s education, your retirement plans or any other fiscal aspect, it’s important to regularly review and adjust your plans to stay aligned with your life’s journey. 

  • Children’s Needs: Your children’s college plans, extracurricular activities, childcare, and health needs can shift over time, impacting financial priorities. Reevaluate your goals to ensure they still align with your family’s needs. What seemed like a distant goal might now require immediate attention, and your financial strategy should reflect that. 
  • Retirement Plans: Have you experienced changes to your work circumstances or investment portfolio that might affect your planned retirement date? Review these changes and determine if adjustments are needed in your retirement plan. Staying proactive about your retirement goals helps ensure a secure and comfortable retirement.  
  • Goal Accuracy: Are your financial goals still aligned with your current situation? Life’s dynamic nature means goals are not set in stone and may need to be refined. Regularly reassessing your goals helps keep your financial plans relevant and achievable.  

Increase Retirement Contributions 

Inflation is a reality that affects everyone. As the cost-of-living increases, so should your contributions to retirement plans. This ensures that your retirement savings will grow to better match inflation, which is crucial for maintaining your future buying power. 

  • Address Inflation: To maintain your purchasing power in retirement, consider increasing your contributions to your workplace retirement plan or IRA accounts. Regularly review your contributions to ensure they keep up with rising costs. 
  • Boost Your Savings: Use this opportunity to assess if and how much you can boost your retirement savings. A small increase now can make a significant difference in the long run, putting that compound interest to work. One idea is to take a percentage of your raise and increase your savings by that amount. So, if you got a 3% raise, consider adding 1% to your retirement contributions to help capture and save some of the extra income. 
  • Take Advantage of Catch-Up Contributions: If you’re 50 or older, ensure you’re maximizing your savings by taking advantage of catch-up contributions. This additional contribution can significantly boost your retirement fund, giving you more flexibility in the future. 

Make Necessary Adjustments for Tax Season 

I know we just finished the 2023 tax season, but at Rowhouse Financial Partners, we believe taxes require constant consideration. The decisions you make now will impact your taxes next April. Planning ahead can help you avoid surprises and optimize your tax situation.  

  • Review Withholdings: Examine your paycheck to ensure the correct amount is being withheld for taxes. Adjusting your withholdings now can prevent a large tax bill or ensure you’re not overpaying throughout the year. Everyone’s preference is different—some people want to avoid having to owe by breaking even or getting a refund, while others prefer to use their money for other things, knowing they’ll likely owe when it comes to tax season.  
  • Increase Withholdings: If you typically owe money when filing your tax returns, you may want to increase your withholding amount. This proactive step can help you avoid an unexpected tax bill. 
  • Reduce Withholdings: On the contrary, if you usually receive a large refund, consider reducing your withholding amount. This way, you can use the extra money from each paycheck to work towards your financial goals. Keeping more money in your pocket throughout the year will enable better cash flow and provide immediate investment opportunities. As the saying goes, the longer your money stays in the market, the better. 

Start Budgeting for the Holidays 

The holidays may seem far off, but they’ll be here before we know it. Preparing now can alleviate stress and ensure you stay on budget. Early planning helps you spread out expenses and avoid last-minute financial strain.  

  • Plan Ahead: Black Friday, a popular time for holiday shopping, is just five months away. Start setting aside funds now to avoid last-minute financial strain and preparing in advance, can enable you to take advantage of sales without compromising your budget. 
  • Incorporate Holiday Expenses Into Your Annual Budget: Make holiday expenses a part of your budget for the remainder of the year. This can help you enjoy the season without financial worry. Including holiday spending in your annual budget ensures that these costs don’t disrupt your financial plan. 

Consult Your Financial Professional 

Regular consultations with your financial professional can ensure you’re making informed decisions and benefiting from expert guidance. Taking the time for a mid-year financial check-in can provide peace of mind and ensure you’re on track to meet your goals. At Rowhouse Financial Partners, we’re committed to helping you achieve financial wellness every step of the way.