8 Steps for a Mid-Year Money Checkup

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We're halfway through the year - do you know where your money is? Take this eight-step, less-than-an-hour checkup and find out.

We’re halfway through the year. Are you halfway through financial New Year’s resolutions? I thought I was, but a quick check on my money proved me wrong. I’ve got some catching up to do before I can meet my financial goals by the end of the year. If you do too, we need to talk.

In the video below, Money Talks News founder Stacy Johnson has six quick steps to give your money a mid-year tune-up. Check them out and then read on for more details.

Here are some more details on Stacy’s mid-year checkpoints, plus a couple of others he didn’t mention…

1. Review your goals

Your money should always be working toward something. If you set a financial goal at the beginning of the year, now is the time to check on your progress. For example, my goal was to add $1,800 to my savings account this year. Since we’re halfway through the year, I should have $900 added to my savings account. I’m a little shy at $750, so I’m playing catch-up.

If you don’t have a goal, make one – like adding to your emergency fund, paying down debt, or saving for the down payment on a house. Once you have a goal, start tracking it. I use Mint’s Goal Tracker feature to keep track of my progress, but a pen and paper work too.

2. Check on your investments

Pull your recent statements and check up on your investments. Do you have a good mix of stocks, bonds, and cash savings?

The right mix for you depends on your age, investment plans, and risk tolerance. Stacy offers this general guideline:

To decide how much to put in loaner investments (the bank) and how much to put in owner investments (stocks or real estate) here’s your rule of thumb: Subtract your age from 100 and that’s the percentage you might want to put in stocks. So if you’re 25 years old, you’d take 25 from 100 and put that amount, 75 percent, of your long-term savings into stocks. If you’re 75 years old, you’d only take that kind of risk with 25 percent of your savings.

If your investment portfolio could use an upgrade, there are ways to invest without much money – like mutual funds. You no longer need $1,000 up front to get in – many funds will let you invest for $50. Morning Star has a Mutual Fund Finder to help you find one. If you’d rather invest in companies directly, sign up for an online investment account. You’ll skip the brokerage’s high fees this way. Here are four online investment sites worth considering:

  • Sharebuilder – $4 for automatic investment, $9.95 for trades
  • Zecco – $4.95 per trade with no investment minimums
  • FOLIOfn – $29 monthly or $290 a year with no investment minimums
  • BuyAndHold.com – $6.99 per month with two free trades and no investment minimums

But don’t forget to check on your savings account. My bank lowered the interest rate three times over the past two years, so I switched to an online savings account. It’s linked to my checking account, transfers are automatic, and I only think about it twice a year when I check on the rate. Here are a few online savings accounts with decent interest rates now:

You can check all kinds of rates – from checking to savings to mortgage – on our rates page.

3. Check on your retirement plan

If you have a company-sponsored 401(k) plan, make sure you’re enrolled and contributing enough to get the full company match. If you’re not, ask your HR department how to bump up your investment.

Don’t have a company 401(k) plan or want to save more for retirement? Then consider an Individual Retirement Account. If you’re under 70, you can contribute to a traditional IRA. To qualify for a tax deduction, you’ll have to stay within the IRS limits.

The tax rules get a bit complicated, but the IRS has listed all of them in Publication 590, Individual Retirement Arrangements. After you learn the ropes, check out our IRA finder to sign up.

 4. Update your tax profile

If you’ve gotten married or divorced, had a child, changed jobs, or suffered a pay cut, your tax withholdings could be inaccurate and you could be paying too much. Like my dad always says, “Taking too much out of your paycheck is like giving the government an interest-free loan.”

To calculate a new withholding, use the IRS Withholding Calculator. You’ll need:

  • A recent pay stub showing taxes withheld to date
  • The amount withheld (or expected to be withheld) for your FSA account
  • The estimated amount you’ll make this year

If you find you can save by adjusting your exemptions, ask your employer for a new W-4.

5. Pull your credit history

Visit AnnualCreditReport.com, get a free copy of credit report, and do a mid-year check-up on your credit history. There are lots of ways to increase your credit score, starting with your free credit report:

  • Check all three reports for errors. If you find any, dispute them with the credit bureaus.
  • Pay down your debts. Aim to get your balances below 30 percent of your available credit limit (or paid off entirely).
  • Pay any past-due accounts and keep them current – it’s 35 percent of your score.

As Stacy mentioned in the video, you could also check your credit score, although getting the most widely-used one – a FICO score – will set you back nearly 20 bucks.

6. Check on your FSA

Do a quick review of your flexible spending account. Find out how much you’ve contributed this year and tally up how much you’ve spent so far.

Since we’re six months into the year, you should be halfway through your FSA account by now. If you’re not, stock up or make a plan to get through that money by Dec. 31. You’ll lose any money you don’t spend by the end of the year. Here are a few FSA spending ideas:

  • Teeth cleaning
  • Annual physical exams
  • Prescription glasses and contact lenses
  • Prescription meds
  • Over-the-counter meds
  • Medical equipment like blood pressure monitors, first aid kits, and braces

To make it easier, visit a site like Drugstore.com’s FSA Store. Common eligible items are listed in the store, you can track your FSA spending, and you may qualify for free shipping and other deals.

7. Track your recent spending

I may be alone in this, but I’m at my financial best in the beginning of the year. It’s after New Year’s Eve, I’ve made my money resolutions, and I’m watching every dime I spend. A few months into the year, I start to slip. I’ve forgotten all the plans I made – and I’m back to my old habits.

To get myself focused, I track my expenses for 30 days around June or July. Every dime I spend (including cash purchases) is tracked by category. Then I go through and see where my money leaks are. This year, it’s dining out. I’m already $130 over my restaurant budget this month alone.  But now that I see it in black and white, I can stop overspending and plug the leak.

8. Update your budget

If you created a budget at the beginning of the year (or several years ago), it may need some fine-tuning. For example, I realized I overestimated my monthly grocery bills by about $75. Now that I know, I can reallocate that $75 to my savings goals.

After you track your spending, add up the categories and compare them to your budget. Adjust your budget for any overages and put that money to better use – like padding your savings or paying down debt.

So how is your money doing? Are you on track to make your financial goals this year? Sound off on our Facebook page and tell us about it.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


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