How to Give Yourself a Midyear Financial Checkup

Those who don’t spend time budgeting, saving and staying on top of their finances often find themselves worried about money.

According to a 2018 survey from Varo Money, an FDIC-insured online bank, 30% of consumers are perpetually stressed about money. This anxiety in part stems from a lack of savings. The study found that 66% of adults reported not having enough money set aside in case of an emergency and 46% reported having no savings.

Actively managing your budget is key for limiting financial stress, and checking in on your finances should be done more than once a year. The end of summer, ahead of the hectic fall and holiday season, is an ideal time to ensure your finances are on track.

With that in mind, here’s how to give yourself a midyear financial checkup:

— Evaluate your budget.

— Plug the leaks in your budget.

— Boost retirement contributions.

— Negotiate fees.

— Review your FSA.

— Take stock of your college savings.

— Protect your finances.

— Inspect your credit report.

— Tidy up your taxes.

[See: 8 Big Budgeting Blunders — and How to Fix Them.]

Evaluate Your Budget

Creating a budget is the first step toward taking control of your spending and improving your financial habits. But it shouldn’t stop there. Your budget must be updated every time you experience a major life event, such as buying a house or having a baby. Checking your budget regularly will keep your priorities aligned with your goals. And taking a comprehensive look at your budget halfway through the year can help you stick to your plan and avoid going into debt, especially ahead of the expensive holiday season.

“You should be tracking expenses on a weekly basis, so you can identify your own spending trends and habits and correct course early on if need be,” says Chad Rixse, director of financial planning and wealth advisor at Forefront Wealth Partners, a fiduciary financial advisory firm with locations in Anchorage, Alaska, and Dripping Springs, Texas. “Staying on top of your budget on a regular basis also ensures you are leaving room in your monthly cash flow to save and invest toward your goals.”

Plug the Leaks in Your Budget

A 2018 survey on checking accounts from the financial comparison site found that U.S. households wasted more than $1 billion in monthly maintenance fees at the top five banks alone last year.

And in addition to bank fees, you may be wasting money on other fees that you no longer need or use. “Review your bank statements in detail to find any recurring subscriptions that you need to cancel,” says Lindsey Head, co-founder of Head Consulting Inc., a professional business and financial strategy consulting agency.

Boost Retirement Contributions

Assessing your retirement savings midyear can help you determine your pacing toward reaching your savings goals before the year’s end and if you can boost contributions and lower your taxable income. Since employer-sponsored 401(k) retirement plans got a bump in the maximum contribution limit in 2019 from $18,500 to $19,000, you likely need to adjust your monthly investments to meet the maximum, says Joe Stenovec, a certified financial planner at Lifetime Financial Advisors Inc., a financial advisory firm based in Encinitas, California. “If you turned 50 this year, take advantage of the catch-up contribution, allowing you to contribute an additional $6,000,” he adds. Though you may not be able to put that much toward retirement, saving anything is crucial from an early age.

“At a minimum, you should be saving enough to receive the full match your employer provides,” says Helen C. Greenwell, certified financial planning at CPA Financial Advantage, a financial planning firm. “For example, if the employer will match up to 5% of your salary, you should be deferring at least this amount of your salary. To do less leaves free money on the table.”

Negotiate Fees

Negotiating your bills — from your credit card company to your cable plan — can help you save money and reduce your monthly spending. Head recommends calling your credit card companies and negotiating your interest rate down if you have credit card balances. “Many people don’t realize that they can often negotiate interest rates when trying to tackle their debt.”

Online services like BillCutterz and TrueBill can also negotiate prices for monthly bills like cable and Internet for you, while CoPatient reviews and negotiates complicated medical bills.

[See: 10 Ways to Save More in 2019.]

Review Your FSA

If you have a flexible spending account, you can use pre-tax dollars to pay for eligible health care expenses, but these costs must be incurred during the FSA plan year to qualify. Speak with your human resources department or benefits manager to find out if your employer allows plan participants to carry over any balance into the new plan year. Otherwise, plan doctor, dental and other health care visits, so you don’t lose out on the money lingering in that account. Analyzing how much you’ve contributed to your FSA can help you better estimate how much you should allocate for the future and make changes during open enrollment in the fall.

Take Stock of Your College Savings

If you hope to help your child pay for college, having a long-term savings plan is key. “It’s important to start saving early because the costs are eye-popping,” says Larry Maddox, president of Horizon Wealth Advisors, a financial planning firm based in Houston. “We expect inflation to continue to run at 5% and with this level of inflation, a child born on August 1 will need around $58,000 for public university to begin college in 2036.”

Maddox recommends saving around $400 per month from when your child is born. But don’t beat yourself up if you’re behind. “Saving anything on a regular basis will help ease the financial burden in the future,” he says.

Protect Your Finances

Being properly insured is key to keeping your hard-earned savings and your lifestyle protected. For instance, those lacking disability insurance may struggle to cover financial obligations in the event they become suddenly ill.

“Review your current insurance policies and meet with an advisor to confirm if you have the right types and amounts of coverage for your individual goals,” says Isaiah Goodman, founder of Becoming Financial, a financial planning firm in the Minneapolis.

Don’t forget that an emergency fund is equally vital for safeguarding your finances. This ensures you have liquid cash to cover any short-term hurdles and avoid potentially devastating debt. Aim to set aside six months of living expenses, Goodman says.

Meanwhile, Patti Black, a certified financial planner and partner at Bridgeworth Financial, a financial planning firm based in Birmingham, Alabama, says many homeowners move forward with home renovations in the spring and this is a good time to update your homeowners insurance policy. “If you’ve completed a major home addition/renovation, check with your homeowners insurance agent to make sure your coverage has been updated to reflect that work,” she says.

Inspect Your Credit Report

If you want to buy a home or open a business, a good credit score will help you get approved for a mortgage or loan faster and qualify for lower interest rates, which will ultimately help you save money. Since your credit report dictates your credit score, reviewing your credit report in detail once a year or more is critical as you can spot and fix mistakes or take action against fraudulent activity quickly.

“Often times you are unaware of identity theft or any other accounts that could be opened in your name,” Head says.

Tools from Credit Karma, Mint and Credit Sesame monitor your credit score and provide tips for improvement, notifications if your credit score recently dipped and signs of potential fraud.

[See: 50 Ways to Improve Your Finances in 2019.]

Tidy Up Your Taxes

With the recent tax code changes, you may be wondering if you ought to tweak your income tax withholding.

“Look at the last W-4 you filled out and double-check your federal allowances,” Rixse says. “The more allowances you claim, the less withholding you’ll have and you want to make sure you are withholding enough to avoid any penalties.”

Conversely, if you make quarterly tax payments, figure out how much more you will need to pay for 2019 early on. “Taxes should not come as a surprise, so understanding what you owe and what you are expected to owe is very important as you approach year-end,” Head says.

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How to Give Yourself a Midyear Financial Checkup originally appeared on

Update 08/22/19: This story was originally published on an earlier date and has been updated with new information.

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