The month of July presents the perfect opportunity for a mid-year financial review. In the beginning of the year, we encouraged you to make New Year’s financial resolutions. Now that the year is half-way over, it’s time to review the progress you’ve made towards your goal and think about the necessary changes needed in order to make it across the finish line. 

Manage Monthly Budget

Paying closer attention to your monthly budget allows you to better understand your essential monthly living costs, and helps to uncover any unnecessary spending habits. 

When life gets busy, it’s easy to let automatic payments do all the heavy lifting for monthly bills. But if you leave it unchecked for too long, you may easily accumulate a multitude of monthly charges that you forgot about or potentially never knew existed. Use this time to review your monthly bank statements to uncover and cancel unnecessary subscriptions, memberships, or other recurring fees.

Boost Retirement Contributions

A lot of life changes can happen in six months! For those who experienced a recent pay raise, bonus, or promotion might want to use this extra income to boost their yearly retirement contributions. 

If you recently celebrated your 50th birthday, you may be eligible to take advantage of catch-up contributions this year. Workers under the age of 50 are only able to contribute $22,500 to their 401(k) each year. However, once you turn 50, you are eligible to make additional contributions of up to $7,500 a year for a total of $30,000 pre-tax contributions. For those who are slightly behind on where they want to be in their retirement savings, these additional contributions help individuals, as the name so implies, “catch-up” to their peers in the same timeline.

Minimize Debts

During a mid-year financial check-in, review any outstanding debts or loans and work to create an achievable repayment plan. This can be accomplished by incorporating debt payments into your monthly budgets. 

You can choose to pay off your debts in a variety of different ways. Some of the most common methods include paying off the smallest debts first, paying off debts with the highest interests first, or allocating a portion of your monthly for each individual debt. For who’s with high interest rates, we recommend investigating your line of credit to see if there is a potential to refinance and save money.

Clean Up Your Books

After April concludes, it’s easy to dismiss tax season from your thoughts entirely. That is, until next year comes around and the tedious process starts all over again. 

In order to make next year’s taxes that much easier, use this mid-year financial review as a chance to organize yourself. Start collecting all your important tax documents, including out-of-pocket medical expenses, mortgage interest rate, income, deductions, and charitable contributions. Once you’ve organized all your documents, place them in a designated area that you’ll remember, preventing last-minute scrambling.

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