Saturday, July 30, 2016

Keep Your Money Goals on Track With a Midyear Financial Checkup


Fantasizing about reaching your financial goals is easy. Actually accomplishing them is more difficult.

More than one-third of Americans considered a financial resolution for 2016, according to a telephone survey of more than 2,000 Americans by Fidelity Investments. Top goals included saving more, spending less and paying down debt. For these goal-setters, summer is a great time to gauge progress made toward those objectives, experts say.

"I do think a midyear financial checkup is a great idea because, hopefully, Americans are slowing down a bit," says Pamela Sandy, a certified financial planner and president of the Financial Planning Association.

Not only is summertime a good halfway point between New Year's money resolutions and year-end tax planning, it'll also be easier to contact financial experts, tax planners, human resources representatives and other advisors, who are less swamped in the off-season.

The warmer months also mark a good time to make new financial goals if you aren't currently working toward any, says Mary Deshong-Kinkelaar, a certified financial planner practitioner based in Akron, Ohio. "It's sometimes better not to get hung up on New Year's resolutions and find time when it's quieter for you," she says.

Here are the financial categories to examine during your midyear financial checkup.


During the summer months, "most people are going to have a pretty good idea of what's happening in their tax situation and can start to plan things better instead of scrambling in December," says Deshong-Kinkelaar.

Take a moment to tally up any major life changes you've undergone in the past six months and include those in your tax strategy. Got married? Had a kid? Bought a house? "Those types of things that are transitions in your life mean a transition in your tax situation," says Deshong-Kinkelaar.

Plus, if you earned a hefty refund in April, or paid a large tax bill, it might make sense to request a W-4 from your employer and tweak your withholding.

The summer months are also prime time to examine whether you're making the most of workplace tax benefits, like your flexible spending accounts and retirement contributions, maximizing tax-saving strategies before the year-end free-for-all.


Planning for the future requires having a roadmap in place for the worst-case scenarios, which can wreak havoc on your financial life.

Experts recommend using the summer months to examine whether your insurance plans are still meeting your needs.

Since employers often hold open enrollment for health insurance and other benefits in late fall, summer is a time to think about your employer health benefits and whether your current situation is meeting your needs before the late-fall melee.

Estate Planning

If you don't have a plan in place for when you're gone or incapacitated, get the wheels in motion. "When I have a planning engagement, we talk about documents you should have in place, making sure your beneficiary designations are appropriate," says Keith Rauschenberger, an independent fee-only financial advisor and president of Rauschenberger Financial Advisors in Elgin, Illinois.

In fact, 64 percent of Americans don't have a will, according to a 2015 survey from Rocket Lawyer, an online legal resource.

Make sure that you have the basic forms, including an up-to-date will, power of attorney forms and health care directives, enabling a person to make medical decisions for you if you cannot make them for yourself.

Estate planning might include a visit to a pro, such as an estate attorney or accountant.

Emergency Fund

Take a moment to check in with your emergency fund. Was it depleted during summer vacation? Has a change in employment made it necessary to beef it up?

Experts typically advise keeping three to six months' worth of living expenses readily available, depending on your job security. Start working on building your rainy day fund by funneling a percentage of your paycheck into a savings account each month, experts suggest. If you don't ever see the money in a checking account, you won't miss it as much.

The Long Term

Summer vacation is a good time to think about where you'd like to see your life in five, 10 or 25 years – and enact the financial strategies that will help you reach those goals.

You might be lounging on the beach in California and decide that you want your retirement to look similar. Or you might be ready to grow your family and realize that you need a bigger home. Says Rauschenberger: "Sit back when you're on holiday or whatever and think about ... 'What am I happy about? What do I want to do in 10 years?'"