How To Refocus Your Financial Goals Midway Through the Year
Believe it or not, we are halfway through 2023, which means it’s time to check in on your progress with any financial goals you set at the beginning of the year. If you’ve veered off track, that’s OK — now is the best time to course correct to finish the year on a financial high note. And if you managed to stay the course, congratulations! Here are a few expert-approved ways to make sure you stay on track with your financial goals for the rest of 2023.
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Make Sure To Check Off Any Static Goals You Set
If you set any static goals — ones that are not recurring — at the beginning of the year, check these tasks off your to-do list sooner rather than later.
“You may have decided to get an insurance policy (e.g. life insurance, umbrella insurance, etc.), or work with an attorney to draft estate planning documents (e.g. trusts, wills, etc.),” said Zach Ciampa, CFP, a financial planner with John Hancock Advice. “Although you still have time to complete those, it’s easier to get them out of the way now.”
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Rebalance Your Portfolio
After you’ve taken care of any static goals, “turn your attention toward dynamic goals, like annual savings and asset allocation,” Ciampa said. “Volatile markets can knock your investment portfolios out of balance, so make a note to routinely check that your accounts are still aligned with your risk tolerance and time horizon.”
Pam Krueger, founder and CEO of Wealthramp, agrees.
“Right now, rebalancing your portfolio is a really smart move,” she said. “This is the time to pay close attention to how much money is in stocks, how much is being invested in real estate and how much you keep in cash. Now that we’re halfway through the year, you may have accumulated more stocks in your retirement plans, possibly replicating the same stocks you own with other investments. This works against your goal of diversification, which is the most important determinant of your success in investing. If it goes unchecked, you will be left with far too much in one particular category or company. Rebalancing your portfolio is the best way to manage your risk and is proven to boost returns.”
Check In With Your Progress Across All of Your Financial Goals
In addition to your investments, the mid-year point is a good time to check in on all the other aspects of your financial plans, including:
Tax Planning
“Monitor pending tax and estate legislation,” said Phillips “Flip” Ruben, CFP, first vice president, senior relationship manager and financial planner at Cambridge Trust. “There are a number of proposals before Congress to revise income and estate tax laws. Speak to your financial and legal advisors to get up to speed on possible implications so you can proactively address any changes that may impact your [2023] return and beyond.”
In addition, now is the time to consider making charitable contributions to offset any portfolio rebalancing and sales that may generate capital gains; implement a tax-loss harvesting strategy; estimate any tax payments; and decide whether it’s in your best interest to convert a traditional IRA to a Roth IRA, Ruben said.
Retirement
Mid-year is a good time to evaluate your 401(k) and other retirement contributions.
“Are you maximizing contributions and taking full advantage of any company match?” Ruben said. “You can view the company match as a 100% return on investment!”
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Estate Planning
“Summer is often a time when families gather. Explore conversations around generational wealth and strategies for introducing children and grandchildren to family wealth, and more importantly family values,” Ruben said. “This could extend to charitable giving.”
Benefits
FSA funds are “use it or lose it,” so “take advantage of benefits that must be used by year-end,” Ruben said. This also goes for any other “use it or lose it” memberships or discounts you may be eligible for.
In addition, “if your deductible is met, or nearly met, are there any procedures or medical appointments that could benefit from doing so this year versus waiting until next year that would be subject to the new year’s deductible?”
Debt Management
If you have debt, you may want to consider refinancing — but be aware of your current interest rates and the new interest rate you would receive before making this decision.
Now is also a good time to review your credit score.
“Review your credit rating to make sure it is accurate and rectify any issues that may be lowering your rating,” Ruben said.
Budgeting
“It’s a good time to reevaluate your spending and asset allocation,” said Roger Young, CFP, thought leadership director at T. Rowe Price. “Your spending habits may have changed during the pandemic. Going forward, this an opportunity to be mindful about what’s important to you.”
Automate as Many Goals as You Can
Automation can take the effort out of staying on track with your financial goals for the rest of the year, so be sure to automate as many goals as possible.
“Investment contributions or savings should be on autopilot so you can remove any mental accounting and free up your time,” Ciampa said. “Certain goals, like budgeting, can easily be derailed by cyclical expenses — e.g. holiday spending or a vacation in the second half of the year. See what you have on the calendar in the later months of the year and try to proactively calculate those into your yearly budget goal.”
Ask For Help If You Need It
There’s no shame in reaching out for help if you’ve veered off course or want to make sure you are realistically able to stay on track for the rest of 2023.
“Don’t be afraid to ask for help from family, friends or financial professionals,” Ciampa said. “Finance is incredibly complex, and it can be difficult to stay on top of everything year in and year out.”
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Gabrielle Olya contributed to the reporting for this article.
This article originally appeared on GOBankingRates.com: How To Refocus Your Financial Goals Midway Through the Year
