Keeping on track: Mid-year financial check-up

Jun 2013

With the cold Michigan spring we’ve had, it’s hard to believe that this month summer officially begins and the first half of 2013 is almost over. June is a good time to review your New Year’s financial resolutions to see if you are on track. If you didn’t make any, it is never too late to give your finances a look and see where you can improve both in savings and trimming expenses.

1. Review your financial portfolio allocation. Make sure your investment allocation is on track per your goals and objectives. With the markets making all-time highs, it is important to make sure your allocation doesn’t get out of whack (bonds vs. equities). Keeping your portfolio allocation intact is one of the best ways to reduce investment risk. If you didn’t do this at the beginning of the year, you should do so now.

2. Emergency Fund Savings in place. It is important to make sure you have some sort of emergency fund in place for that unexpected bill or event. Three to six months of living expenses should be a sufficient amount to keep in your bank account. I would recommend having your emergency account funded before increasing any other savings goals.

3. Make sure your savings rate is on track. If you have a retirement plan at work (i.e. 401(k) or 403(b)) make sure you are at least contributing what your company will match, so you will get the benefit of getting free money. If you are already contributing, but not maxing out, see if you can increase your contributions. If you are already contributing the maximum to your workplace plan, check out contributing to a Roth IRA as well.

4. Make sure your W-4 is on track. If you overpaid Uncle Sam and got a large refund on your tax return or you unexpectedly owed more than you anticipated, now is a good time to revise your W-4 at work while there is still some time to make a difference. You should reduce the number of exemptions so more federal income taxes are withheld from your paycheck (if you owed too much on your tax return) or increase the number of exemptions so less is withheld to keep more cash in your pocket (in the case of a large refund).

5. Check you credit report. If you haven’t already done so, you should request your free annual credit report at I always do this each year around the time I am filing my income taxes to make sure there is no fraudulent activity andto make sure all outstanding debt I do have is accurately reported. Think of your credit report as your personal report card. Correcting any errors now can save you unnecessary grief when you are trying to obtain a loan.

6. Track your spending. Even if you have extra money at the end of the month, it is always a good idea to see what you are spending your hard-earned cash on. Write down everything you spend money on for the month from your non-discretionary bills (i.e. rent/mortgage, car payment, utilities) to your discretionary spending (i.e. entertainment expenses, eating outs Edits, the daily Starbucks stop, etc.). You may be surprised to see what excesses you have in your monthly spending habits. By trimming your unnecessary expenses, you may be able to put more away for retirement, pay down debt quicker or even save more for your annual vacation.

Maintaining good financial health is just as important as our personal physical/mental health well-being. A mid-year check-up can help you address any concerns that come up and help you to stay on track in meeting your retirement goals. Good luck and have a great summer!


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