The midpoint of the year offers a perfect opportunity to pause and evaluate your financial progress. A mid-year review allows you to reassess your goals, make adjustments where needed, and ensure you’re on track for the remainder of the year.
Whether you’ve made significant strides toward your goals or need to adjust your course, taking the time to review your financial health now can set you up for long-term success. In this blog post, we’ll guide you through the essential steps for conducting a thorough and effective mid-year financial planning review.
#1: Assess Your Financial Goals
The first step in your mid-year financial review is to take a close look at your financial goals. Whether you set short-term or long-term objectives at the start of the year, now is the perfect time to assess where you stand.
Begin by evaluating the progress you’ve made toward these goals. Have you made headway in saving for a home, retirement, or your child’s education? Are you on track to pay down debt by year’s end? If you’ve made significant strides, take a moment to celebrate those wins.
If some goals are behind, remember it’s not a setback—it’s an opportunity to refine your approach. Life is unpredictable, and adjustments are part of the process. Perhaps an increase in your income or unforeseen expenses means it’s time to tweak your savings targets or timelines.
Additionally, significant life changes such as a job promotion, a move, or the arrival of a new family member should prompt a reassessment of how your goals align with your current situation. Adjust your strategy accordingly to ensure your financial plan remains realistic and aligned with your evolving circumstances.
#2: Evaluate Your Budget and Cash Flow
The next step in your mid-year financial review is to take a close look at your spending habits. Your budget is the foundation of your financial health, and reviewing it mid-year allows you to identify areas where you might be overspending (or underspending).
Start by comparing your actual monthly expenses against your budgeted amounts. Have your costs been in line with expectations, or have certain categories exceeded your budget?
Common culprits for overspending include dining out, shopping, or subscriptions that you’ve forgotten about. By identifying where money is leaking, you can make adjustments to stay on track.
This is also a great time to reassess your emergency fund. Most experts recommend setting aside three to six months’ worth of living expenses in case of unexpected job loss, medical bills, or other emergencies. If your emergency fund is insufficient, consider allocating more money toward it for the remainder of the year.
#3: Check Your Investment Portfolio
While it’s tempting to check your investment account balances regularly, it’s more effective to review your portfolio periodically to stay aligned with your long-term financial goals. Markets are constantly evolving, and it’s crucial to assess whether your investments still align with your risk tolerance and objectives.
Start by reviewing your asset allocation. Is your portfolio still diversified, or have market shifts caused some imbalances? For instance, a surge in stock prices might leave you overexposed to equities, while a dip in bond prices could leave your fixed-income assets underrepresented. Such fluctuations can skew your portfolio, making it important to rebalance to maintain the right allocation based on your financial goals and risk profile.
This mid-year review is also a great time to consider whether any significant life changes—such as a new job, a promotion, or a major financial decision—should influence your investment strategy. Similarly, if your tax situation has shifted, you may want to adjust your portfolio to optimize for tax efficiency or align with updated goals. Taking the time to conduct a mid-year financial review now can help keep your investments on track for the future.
#4: Review Your Retirement Plans
A mid-year financial review is the perfect opportunity to assess your retirement savings and ensure you’re on track to meet your long-term retirement goals. Start by reviewing your contributions to retirement accounts like your 401(k), IRA, or Roth IRA. Are you contributing enough to reach the annual contribution limit?
For 2025, the IRS allows individuals under 50 to contribute up to $23,500 to a 401(k) and $7,000 to an IRA. If you’re 50 or older, you can contribute an additional $7,500 to your 401(k) and $1,000 to your IRA through catch-up contributions.
It’s also important to revisit your retirement projections to see if you’re on track to retire comfortably. Retirement calculators can help estimate how much you need to save each month or year based on your target retirement age and lifestyle. If you’re falling short, consider increasing your contributions or adjusting your retirement timeline to ensure you stay on track.
Additionally, review your investment strategy to make sure it aligns with your retirement goals and time horizon. As you approach retirement, your risk tolerance may shift, which may necessitate adjustments to your asset allocation. By reassessing your approach now, you can make strategic changes to minimize risk and safeguard your retirement savings as you near your financial goals.
#5: Review Your Tax Strategy
Mid-year is also an ideal time to review your tax strategy, especially if you experienced an unexpected tax bill or refund last year. By taking a proactive approach now, you can avoid surprises when tax season rolls around and explore strategies to reduce next year’s tax liability.
Start by reviewing your paycheck to ensure the correct amount is being withheld for taxes. This is especially important if you have equity compensation, such as RSUs, or if you’ve recently received a raise. Any significant changes to your income could affect your tax withholding, so it’s essential to adjust accordingly to avoid underpayment penalties or an unexpectedly large tax bill.
Additionally, consider contributing to tax-advantaged accounts, such as Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs), to lower your taxable income. If you have a qualifying high-deductible health plan, contributing to an HSA not only helps you save for future medical expenses but also offers immediate tax benefits. These contributions can help reduce your overall tax burden while improving your financial flexibility.
#6: Assess Your Insurance Coverage
Insurance is a key component of your financial plan, and it’s essential to review your coverage at least once a year. During your mid-year financial review, take the time to ensure that your health, life, and property insurance still align with your current needs and life circumstances.
Have you experienced any significant life changes, such as purchasing a new home, having a baby, or getting married? These events may require you to adjust your coverage. For example, you may need to update your life insurance policy to include new dependents or increase your homeowner’s insurance to reflect the value of your new home or any valuable possessions you’ve acquired.
In addition to reviewing existing coverage, consider whether you need additional protection. For instance, umbrella insurance can provide extra liability coverage beyond the limits of your home or auto insurance, offering an added layer of financial security as your net worth grows. If retirement is on the horizon, now is also a good time to evaluate whether long-term care insurance should be part of your financial plan, so you’re well-prepared for the future.
TrueNorth Wealth Is Here to Help
A mid-year financial review is a powerful tool for staying on track with your financial goals. It not only allows you to celebrate the progress you’ve made but also provides the opportunity to make adjustments, ensuring the second half of the year is as successful as the first. By taking the time now to reassess your financial strategy, you’ll gain clarity and peace of mind, setting yourself up for continued success throughout the year and beyond.
Remember, it’s not about perfection—it’s about progress. At TrueNorth Wealth, our team of fiduciary CFP® professionals is committed to helping high-earning professionals and entrepreneurs create financial plans that reflect their lifestyle, values, and long-term aspirations. Together, we’ll build a plan that keeps you moving forward with confidence and purpose.
TrueNorth Wealth is among the top Wealth Management firms in Utah and Idaho, with offices in Salt Lake City, Logan, St. George, and Boise. At TrueNorth Wealth, we focus on helping our clients build long-term wealth while maximizing the enjoyment they receive from their money. We do this by pairing our clients with a dedicated CFP® professional backed by an incredible team.
For our team at TrueNorth, it’s about so much more than money. It’s about serving families all across Utah and helping them achieve freedom and flexibility in their lives. To learn more or schedule a no-cost consultation, visit our website at TrueNorth Wealth or call (801) 316-1875.
