Now is a good time to conduct a midyear financial checkup as you take in the second half of the year.
There is no doubt that it has been a challenging last few months, to say the least. The pandemic has wiped out a lot of small and start-up businesses. It has put several industries under a lot of operational stress. As a result, many of them are folding up, closing down physical stores, and even laying off workers. All in a bid to try and cut costs or save whatever is left.
This has resulted in a lot of Americans losing their jobs. ABC News even shares that jobless claims have topped 1million applications for the past 3 months. This just goes to show you how many people are already affected. Many are losing their jobs and forced to rely on the government for some much-needed cash assistance in the form of unemployment benefits.
But this should not stop you from conducting a midyear financial checkup. Regardless if you still have a regular job, on rotation, furlough, or have lost your source of income, a financial checkup will help. It can make you understand your finances better. This can also give you the chance to identify areas you need to immediately work on.
This can also help you get out of a rut if you feel you have been stuck for some time now, A financial checkup can help you focus on specific areas that thees to be accomplished. It will help you manage your time better. In the end, you could see better results with your plans and could provide that needed boost to accomplish more.
Revisit your household budget
As you should know by now, conducting a midyear financial checkup has to start with your household budget. This is one of the most important financial tools you will ever need. You need your budget to be as comprehensive as possible. This will give you the chance to make informed money decisions at any given time.
A comprehensive budget simply means being thorough with your data. You need to make sure that your expenses are up to date as well as your income sources. If you are still holding on to your regular job, you need to base your budget on your net pay. Include any other sources of income you might have like your side hustles.
Make sure that your expenses are updated as well. There is a good chance that you have made a lot of changes from the time before the health crisis hit. You could be trying to cut down on several areas or eliminated some entirely. It is important that these changes are reflected in your budget to help you stay on top of your finances.
Renew resolutions you made at the top of the year
Your midyear financial checkup should also include your new year’s resolution. These are targets you have set your sights on at the beginning of the year. Normally on top of this list are health and financial goals. You might have joined your local gym in an effort to lose weight and feel healthier. You could also be looking to pay-off several debts before the year ends.
At the start of the year, no one could have predicted the extent of what this pandemic can bring. It has challenged a lot of industries and put millions out of a job. At this point, the resolutions you have made at the beginning of the year might be difficult to reach. One thing you can do is make revisions so you do not totally abandon them.
If you have health goals, you can still continue to pursue them without spending on gym memberships and expensive equipment. You can exercise at home and monitor your food intake. In paying down your debts, you may not completely pay them off but you can pay more than the minimum. This way, you can get ahead of your payments when things go back to normal.
Rebalance your investments
A midyear financial checkup can also help you take a look at your investments and give you the chance to make the necessary adjustments. The health crisis could have put your investments in turbulent waters. You need to look at your forecast and determine if you are still on track. If you are then good. But if you are off-course, consider reallocating some investments to help you reach your goal.
Checking up on your finances also means looking at your reserve funds to see where you are with them. For one thing, the pandemic could have forced your hand into dipping into this account. It is a good idea to try and continue putting money into it especially if your finances are not that all affected by the health crisis.
This is one of the financial habits you need to work on in order to help you manage through challenging ordeals in your life. Your emergency fund can cover your expenses while your income is impacted. This is why you need to make sure that you get to beef up this fund because you never know what the second half of the year has in store.
Your midyear financial checkup also has to include your credit score. It might not be your priority at the moment bu your credit score can still open a lot of financial benefits for you in the future. A high score could make it easy for you to open new lines of credit. You might need one if you wish to consolidate credit card debt with a 0% card.
The good thing is that you do not even have to spend on it. You can have free access to your credit report as stated in the Fair Credit Reporting Act (FCRA). According to FTC, you can request a free copy of your credit report from nationwide credit reporting companies once every 12 months. This can be requested from Equifax, Experian, and TransUnion.
Your retirement planning forms a big part of your future goals. This makes it all the more important to include in your financial checkup. You need to make sure that you are still on track with your savings. This could be already part of you rebalancing your investments especially with what happened after the health crisis.
If you have other investments meant for your retirement savings such as 401k, this could be a good time to check up on your accounts. There are some hackers who have been known to target 401k accounts. This is because people do not look into it regularly. As a result, it takes a lot of time before illegal activities are uncovered and reported.
You need your midyear financial checkup especially as the health crisis made financial management a difficult task for a lot of people. This will help you identify problem areas and focus on these items to get you back on track. Once you are able to focus on what you need to do, you can expect your finances to bounce back slowly. It could take a lot of time and hard work and definitely challenging. But it is not an impossible task.