Financial plans require regular maintenance to keep things running smoothly. So, now that it’s summer, and you’ve hopefully got the opportunity to sit back, relax and unwind a little, it’s actually a great time to do a midyear review of your financial situation.

A financial checkup allows you to take stock of how you’ve progressed towards any goals set at the beginning of the year and then make plans for the months ahead. A little organization goes a long way towards maintaining your financial stability, not to mention it can also benefit your mental health.

When you’ve got a clear view of where you’re sitting and where you’re going, there’s far less to worry about. If things aren’t looking so bright at the moment, you can always pivot or adapt to get yourself back on track.

Begin with Your Budget

Start by reflecting on how your life has unfolded over the last six months. Were there any new expenses or changes that impacted your savings or income? Births, deaths, special events, travel, and job transitions all make a difference to your bank account or tax situation and should be taken into consideration.

Evaluate your budget and see if it requires some tweaking as a result. Do you need to top up your emergency reserves or can you afford to put a little extra towards your rainy-day fund?

Next, examine your recurring expenses. What subscription services are you paying for, and are you taking full advantage of them? How far behind are you on that Patreon True Crime podcast — is it time to finally let it go? Finding places to trim the fat, even if it’s only a few dollars a month, can quickly add up over the year.

Lastly, ask yourself where most of your disposable income is going. Do you eat out almost as often as you eat in? Do your retail therapy sessions get a little frivolous? Again, find ways where you can trim back a bit. Allocate a monthly budget amount that you feel is fair for dining out or shopping.

You don’t want to deprive yourself of good times, but you don’t want to spend yourself into hard times either.

Deal with Debts

Once you’ve reassessed your monthly expenses, next develop a strategy for putting more money towards your high interest debts. The sooner you pay off your principal balance, the less money you’ll be throwing away on interest charges that can be better invested elsewhere. Ensure that you’ve been staying up to date on your payments, so you don’t get dinged with higher interest rates.

If you’ve missed a couple, start setting reminders or arrange for automatic withdraw so it doesn’t happen again. If you’re able to consolidate your high interest debts into a low interest line of credit, even better!

Strategize Your Savings

After putting more money towards your debts, if you’ve still got some wiggle room in your budget, take a look at boosting how much you invest in your Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA). Did you know that you can put up to $6,000 per year into your TFSA?

In fact, maxing out your TFSA before your RRSP is a wise approach as TFSAs offer numerous benefits including…
 Building your savings tax free, so you know exactly how much you have when you
decide to withdraw
 Withdrawing and recontributing funds without penalty or having it count as income
 Greater flexibility to customize where you invest

As your financial goals change, the investments within your TFSA should change as well. For instance, the closer you get to retirement, the more likely you’ll want to invest with low-risk options like bonds and cash versus stocks or mutual funds, etc.

Check Your Credit Report

Reviewing your credit report through Equifax and Transunion will give you a good idea of where you stand should you wish to buy a house or require a loan. It’ll also help you to ensure that there are no strange items accounted for or possible instances of identity theft.

Paying off debts and settling bills on time are two easy ways to increase your credit score and be seen as a low-risk candidate, which means you could qualify for a lower interest rate on future loans.

Tidy Your Taxes

Why wait until tax time to review your receipts? Get ahead of the game and you’ll thank yourself later. Start that spreadsheet, file those figures, do a midyear review with your accountant or bookkeeper. A little work now will save you so much time and effort in the end.

Evaluate Your Estate Plan

Death is a part of life that most of us would rather overlook. However, having an up-to-date estate plan is so important. Deaths, births, marriages all have an impact. Experts suggest reviewing your estate plan once every 5 years. So, if it has been a minute, why not make it part of your midyear review and tackle all financial aspects all at once?

Setting a day or so aside during the summer (or when you find the spare time) to deal with your financial health is certainly time well spent. While it may seem like a lot to tackle up front, you are doing yourself a huge favour
without the pressure of a deadline, like we’re often faced with at tax time.

Afterwards, you will have earned that cool beverage of choice on a sunny patio, rest assured that all is well in your financial world.

Subscribe for Updates

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!