by | Jul 19, 2023

Five Actionable Ideas for Your Mid-Year Financial Checkup

Every January gyms are filled with a plethora of people who decided their new year’s resolution was to get in shape–we’ve all been there at some point or another. Eventually, however, the new year inspiration fades away–two days, two weeks, or two months later, and with it fades visits to the gym.

Similarly, there are dozens of articles and inquiries all focused around “getting in shape” financially. The eventual piling up of all the goals we meant to accomplish can seem frustrating and disappointing after a while, but the most important reminder we can tell ourselves is this: There is nothing special about January 1st.

Those who are successful are those who are perpetually consistent, NOT perfectly consistent. Let’s dive into five Mid-Year financial check up tools geared towards helping you stay on track.

1.) Think, Dream, Act

This may be the most important and often overlooked tool that individuals or families can use.

Take a weekend, a weeknight, or even 15 minutes on your lunch break and ask yourself:

  • What financial goal do I want to achieve in the next 6 months, a year, etc.?
  • Is there a step I can take towards that goal today?
  • What guardrails, reminders, or action steps can I put in place this week to help me achieve this goal?
  • Remember, any goal must be SMART (Specific, Measurable, Attainable, Relevant, Timely.)

2.) Consider Bucket Budgeting

You may not budget at all, or you may track every penny. Either way, there is one common mistake which can derail our balance between savings and spending. When our budget falls out of line, it can be hard to get back on track, but let’s be realistic–no one month is going to be the same.

Bucket Budgeting is coming up with an annual amount for a specific “bucket” or category and then tracking that bucket throughout the year.

  • An example: let’s say you have determined not to spend more than $50 a week eating out, but after New Year’s Eve, Valentine’s Day, and a fun couple of weekends, you have already surpassed your halfway mark before the summer.

This is enough to deter most people from budgeting in the first place and can usually lead to abandoning the budget altogether once you’ve consistently spent over what you wanted to each month.

By thinking of your budget on an annual basis instead of a month-by-month basis, you can capture a wider perspective of your financial picture, which can help some people stay on track without feeling defeated.

No matter where you are on your financial journey this year, it is never too late to hop back on track.

3.) Evaluate Savings

Often, we can either underestimate or overestimate ourselves when it comes to how much or little we think we can save. It is almost the middle of the year, so by now you probably have a better idea whether your current savings rate is too much or not enough.

  • Can you contribute more to a retirement account?
  • Is there a vacation fund that needs to be replenished?
  • Car purchase looming around the corner? etc.

All of these and more can be important savings components to our overall financial plan that can sometimes be “out of sight, out of mind” if we are not diligent to routinely check on them. Remind yourself of the benefits you might have through your job, invest some of that emergency fund that has piled high above the necessary amount, or slow down your 20% savings rate if you’re carrying a credit card balance.

4.) Start Investing

Whether you are investing for the first time or are waiting out the market to see if something will happen, the most important thing you can do after saving is investing. No matter what is happening in the market, start investing–and don’t stop.

Do not invest what you need soon, but choose a monthly amount you can stick to. Begin investing without pulling money out or attempting to time different allocations perfectly.

As Nick Maggiulli writes, “Just Keep Buying.” Investing is owning–you haven’t “lost” money when the market corrects cyclically. You own shares of these companies, and since we are investing for the long run (see a previous article of ours titled “Investing for the Long Term”), you can rest assured when investing appropriately that the future is bright.

5.) RELAX!

No matter where you are on your financial journey this year, it is never too late to hop back on track. Setting financial goals and attempting to stick to them can seem overwhelming, but you don’t have to be perfect to achieve your goals. You just have to be consistent and determined to correct course when things get rocky.

Enjoy your vacation, don’t over tighten your budget and then indulge later, and do a little financial “self-care.”

Being consistent is not a matter of always staying on top of your to-do list or action items but rather adhering to a certain standard of dedication that is committed to the long haul. This practically works itself out in our day-to-day lives through frequent monitoring and self-awareness. These tools and reminders are simple tips aimed at helping you think through “What’s next?”

The opinions expressed in this program or blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security.

It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results.

Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.

Investment Planning Advisors is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Investment Planning Advisors and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Investment Planning Advisors unless a client service agreement is in place.