A Checklist for Your Mid-Year Financial Checkup

As summertime rolls around, thoughts turn to vacation, barbecues and the beach. To fully enjoy those moments, you want to be sure you’re in solid shape financially. Time for a mid-year financial checkup.

With 2012 approaching its midpoint, the personal financial experts at the Financial Planning Association recommend a mid-year financial checkup. It’s a fast, simple and worthwhile process that can pay major dividends later in the form of a lower tax tab, a larger retirement nest egg and less debt, not to mention the peace of mind that comes with having a handle on your finances.

“This is a great time to assess where you stand financially, and to plan for the remainder of the year,” said June Ann Schroeder, CFP®, with Liberty Financial Group in Elm Grove, Wis.


Here’s a checklist to make the mid-year financial checkup quick and painless, so you can get back to your summertime pursuits:

  • Retirement savings — Are you consistently contributing to a retirement plan [IRA, 401(k)]? Are you contributing enough? Do you have a plan? If you’re 50 or over, are you taking advantage of retirement plan catch-up provisions in the tax code? Given the importance of having, and sticking to a retirement savings strategy, it’s worth discussing with a qualified financial planner.
  • Had any life changes involving marital status, a new child, an inheritance, a home purchase, change in employment or health status, a major unexpected expense? Such changes could necessitate adjustments to insurance coverage, investments and retirement planning, tax status and more.
  • Debt — If mounting credit card balances are becoming an issue, it’s time to make a plan for paying those down, even a little each month, while taking steps to curb your use of plastic.
  • Credit rating — Go to www.freecreditreport.com to request a free report and review it carefully to see if anything’s amiss.
  • Tax withholding — Check with your employer to confirm the right amount’s being withheld from your paychecks, then adjust as necessary. If you got a large tax refund or made a large tax payment last tax year, that’s an indication your withholding could need adjusting, according to Schroeder. If you’re self-employed, are your quarterly tax payments in step with your income thus far this year (and your projected income for the remainder of the year)?
  • Tax efficiency — Is your retirement and investment portfolio structured to take maximum advantage of the tax code? Are there 2012 tax breaks you could take advantage of before the end of the year? Consult a tax expert to find out.
  • Emergency fund — Do you have adequate funds saved to protect against an unforeseen financial blow, such as job loss? You should have three to six months of living expenses in savings.


This column is provided by the Financial Planning Association® (FPA®).

Photo credit: crockettphoto