7 Mid-Year Financial Checkup Basics

August 19, 2010, By Eric Brennan 0 comments

It's that time of year when we have to close up the barbecue grill and put away the hamburger buns. No, it's not fall, it's time for a mid-year financial checkup.

While it may seem like fun in the sun is calling this summer, it is a good time to do some financial planning and get all of your ducks in a row. So kick off your flip-flops and put on your accounting hat; it's time to get down to midyear financial checkup basics.

Credit Check

One of the first steps of a midyear financial checkup is to check your credit score. You can check your score each year for free, so don't get scammed into using a pay website. Annualcreditreport.com is where you can get a free annual report from each of the three major credit reporting agencies. Your credit report can help you evaluate what areas of your credit may need the most work.

Track Your Debt

Speaking of credit, you may need to check how much you owe and when it will be paid back. The debt calculator at cnn.money.com can give you insight for the next six months on your credit card payments, interest accrued and when you'll be able to pay them off. It can also help you set up a payment plan that fits your budget.

Check Your W-4

If you are an employee, calculating your withholdings correctly can determine whether your employer withholds too little or too much from your paycheck each month for taxes. Using the official IRS withholding calculator can get you headed in the right direction for when April rolls around.

Evaluate Monthly Expenses

Monthly bills are often overlooked during a midyear financial checkup. Just by doing a check against the previous year's expenses, you can evaluate what monthly bills may have dramatically changed. This is a good time to do some research for alternative companies that may have better deals. Cable may be cheaper than satellite, your auto insurance might be cheaper with another company and your credit cards might not have as good a rate as the competition. A few phone calls might help you save a great deal of money each month.

Save for the Holidays

Saving for the holidays is more than just stuffing away a few extra dollars in the sock drawer. Setting up a high-yield savings account can really help generate some extra cash by the time the holidays roll around.

Asset Maintenance

Now is the best time to maintain your assets. Simply put, this means fixing your broken stuff and maintaining any other assets you may own. When you do it all at once, you can keep track of records easier for tax time. Cars, trucks, RVs, boats, lawn equipment and any other gas-powered assets should receive a tune-up. Electronic equipment and appliances should all be checked to ensure it is all in top working order. Update any warranties as needed.

Update

The last thing left to do for your midyear financial checkup is to update everything. Any changes that occurred in your income or finances should be added to your budget. Any major purchases such as cars, homes, etc. should all have updated insurance policies. Finally, your will should be updated to reflect any change in your assets and finances in the last six months.