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PIVOT! Your Mid-Year Financial Checkup

PIVOT! Your Mid-Year Financial Checkup

July 06, 2021

We are half of the way through a year we were uncertain would never come! As things are starting to resemble what we remember as normal, you may find it's a good time to get re-focused on pursuing your financial goals.

If you're considering a Mid-Year Financial Checkup for 2021, here are some places to start:

1.    Review your annual goals.

You likely started the year with high hopes of your most productive year yet. Did you want to lose your Quarantine 15? Teach your dog a new trick? Start saving for your children's college or maybe make a major purchase? Now's a good time to review your Annual goals for the year, assess where you are, and develop an action plan to achieve them. If you're not headed in a direction that will lead you to goal attainment, now is an excellent time to pivot!

2.    Check on progress towards funding investment & savings accounts.

401(k)s! FSAs! Roth IRAs! Oh My!

Now's a great time to review balances and your savings pace in your savings accounts. Do you need to top off your emergency fund after some use in the last year? Are you on pace to maximize your contributions to your retirement accounts? What about Flexible Spending & Health Savings Accounts? If your plan was to max out your contributions to your retirement savings plans or other accounts this year, check to see if you've funded 50% toward that goal. If not, and if your emergency fund is where you'd like it to be, it might be time to make some extra contributions to those accounts.

If you're not up to date on contribution limits to each of those accounts, check out the IRS website for more details.

3.    Are you on track for tax withholdings or Estimated payments?

Ah yes, taxes. If you've moved out of state in the last year and you're self-employed, it might be a good idea to look into where you should be sending your Estimated Tax Payments for your State Income Tax.

In my experience, many people are moving from states with a high(er) *cough California* state income tax to states with lower or no state income tax **cough cough Texas, Nevada & Washington**. If you happen to not be one of the lucky ones but have still made a move, check online for your state's tax board or tax collection agency to get to know their process for collecting taxes and start making estimated payments.

If you're behind on making your Estimated Tax Payments to the IRS, here's a reminder of where to go to make the payments: Your tax accountant likely provided you vouchers based on last year's taxes that show you the amount you should be sending in quarterly.

If you're a W2 employee, and you've owed in the past, you may want to review your most recent paystub to see how much has been withheld from your paycheck YTD. If it's less than half of what you owed last year, it's likely you'll need to make some changes to your withholdings. Reach out to your HR department for help with this.

As always, it's best to consult your tax pro on all things taxes as he/she can best advise you based on your personal situation and ever-changing tax guidelines.

4.    Anticipate Large Expenses planed between now and the end of the year.

Does the Holiday Season seem to come out of nowhere for you every year? It may be the 4th of July this weekend, but Christmas will come out of nowhere. Whether it's extensive travel to see family and loved ones, you've been planning to take a long vacation in the fall, you've always wanted to pay your auto insurance for 6 months to get the discount, or you always seem to need tires this time of year, now's a great time to start systematically saving for large purchases.

5.   Re-commit to Debt Repayment.

Student loans are baaacck. As of now, there's no plan to relieve you of student loans entirely and it seems that payments will be back at the end of September. Now's a great time to consider refinancing options, if applicable, or confirming that your lifestyle hasn't crept up too much and taken over money that was meant for student loan payments.

Confused about student loan payment options? Wondering how the CARES Act impacts student loans going forward? I'll be on a webinar hosted by Gradfin in early August. Contact me to register to attend.

Any other debts owed? Develop a debt repayment plan. I'm a big fan of the snowball method: list your debts in order of smallest balance to largest balance, make the minimum payments on each piece of debt and apply any extra cash to the debt with the smallest balance until it's paid off, then move to the next one!

As a general rule, I advise my clients to pay off or refinance anything over a 6% interest rate. You should talk to your financial pro to see what might make the most sense for you.

6.    Get started with Financial Planning.

Woohoo! You read the entire article, which is half the battle! If you're feeling overwhelmed, you're not alone. People often hire me to help them create a plan to achieve one financial goal and then realize all the areas of their finances are connected.

Working with a Financial Planner should lead to you feeling more organized about what you have, more clear on the direction you're headed, and more confident about how you'll get there.

This is an excellent time of the year to get started. You may find this surprising, but July is usually the month when I onboard the most clients.

If you'd like to learn more about the Financial Planning Process and to schedule a free 30-minute chat to learn more about how it works, click here.

Kristin A. O'Neal, LPL Financial Planner & Owner of HerPlanning. For more info: