Time for a mid-year financial check-in! Are you on track with your budget, your debt payments and your financial goals? Here’s a checklist of four questions that will help you evaluate your progress so far and keep on the right course for the rest of the year.
- Are You Managing Debt?
Understanding and managing your debt is one of the most important activities you can do to keep your finances in good health. Around thirty percent of your credit score is based on outstanding debt, and another thirty-five percent of your score is based on payment history – so keeping up with bills and paying down your debt makes a big difference.
During your mid-year financial check-in, request a free copy of your annual credit report, which lists personal financial information including current debt, loans and bill payment history. Make sure this information is accurate and that you’re keeping up with monthly bills. If money is tight and it’s becoming difficult to make credit card or loan payments as usual, speak with your loan officer right away – before you miss a payment.
- How’s Your Budget?
Hopefully, you kicked off the year by creating an annual or monthly budget to help track spending, cover important expenses, and save for the future. If you still don’t have a reliable budgeting tool, use your mid-year financial check-in as an opportunity to get one! Apps like You Need a Budget and Mint are popular options to monitor cash flow and be more mindful about where your money is going.
On the other hand, if you have been keeping a budget for the first half of the year, take a moment to check in with your incoming cash flow and expenses. Many families are discovering higher-than-average prices at the supermarket and gas station; so if this has been your experience, it could be a good time to readjust your budget so that your spending goals are aligned to the average costs of the goods and services you need.
- What Credit Cards Are in Use?
Credit cards and online billing have automated the process of spending and paying your balance. It’s convenient – but it can also be dangerous! During the mid-year financial check-in, thoroughly review all the credit cards you’re currently using. Make sure that monthly payments are happening when they should, and that there are no expenses you don’t recognize.
This is also a good time to comb your credit card bills for any recurring payments for services you no longer use. The cost of entertainment and news subscriptions can creep up fast, especially if you’re not regularly reviewing your credit card bill. In addition, if you’re not paying off your entire balance every month, consider revising your budget to make that possible – because hanging onto a balance month after month means more interest to pay in the long run and will negatively affect your credit score.
- Do You Remember Your Financial Goals?
At the beginning of the year, many people lay out their financial goals for the next twelve months – whether it’s paying off a credit card, saving up for a big vacation, or making headway toward buying a home. Now that half the year has gone by, go back and reflect on your original aims. Are you making progress toward your goals? If not, what’s getting in the way?
On the other hand, you might not even remember your original goals. That’s totally fine! Make some new ones, and this time, write them down. Use pen and paper – rather than a computer or phone – to make a note of what you’re saving for and how much money you’ll need to make it a reality. Having a physical record of what you’re aiming to achieve will make it much easier to stick to a budget and eliminate unnecessary spending.