Mid-year financial report: is it time for a new plan?


Reviewing how you’ve managed money over the past six months can do wonders for staying on track with your goals. Here are tips for an effective financial check.

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Q: When my girlfriend and I got our tax refunds, we saved them because one of our goals that year was to raise the money for our first post-COVID trip. Another goal, however, was to pay off our credit cards so we could start saving for our wedding. Needless to say, with the high cost of living, we haven’t left a big dent in our credit card balances. This is super frustrating because we are now halfway through the year and no better off than when we started. What can we do? ~ Todd

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A: If the first six months of 2022 are any indication of what’s to come, our finances could be in for a wild ride. Many people who have made New Year’s resolutions have probably revised them several times or given up altogether. But in the words of William Arthur Ward: “The pessimist complains about the wind; the optimist expects it to change; the realist sets sail.”

July is a great time to do a mid-year financial review and adjust any sails that need adjustment. It’s an opportunity to review where you are in relation to your goals and create a plan for the next six months. A revised plan is better than no plan, so here are some tips to get you started:

What is a mid-year financial review or audit?

A mid-year financial report is an opportunity to self-examine and review how you are doing with your finances. You may want to compare where you are now with where you were six or twelve months ago, or where you are in relation to your goals.

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A financial review will vary a bit from person to person depending on a person’s circumstances. However, a checkup should always include a thorough review of all your income, expenses and bills, your savings and investments, and your budget. It may also include a review of related financial matters, e.g. B. Pension plans, insurance policies and taxes.

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Is there something to zero?

With inflation impacting our post-pandemic finances, it’s important to focus on everything that matters to our goals. If controlling your spending is important, dig deep into all of your spending. Track where you spend your money and if you live within your means. Using credit to supplement your paychecks is not a sustainable strategy when interest rates are rising. Make informed decisions and changes once you know your spending habits.

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7 tips against the high cost of living

If reducing your debt burden is important to you, take a good look at your debt Debt management strategies. Ask yourself: are your balances going up or down? Do you prioritize paying off your most expensive debt or the account with the highest balance owed? Are you using your line of credit as a lifeline and need a consolidation loan instead? take steps Align your actions with your goals.

What is the best way to pay off debt?

During the pandemic, many Canadians realized the importance of having an emergency savings fund. If you’ve determined you need one, think about what you’re doing to put money aside for a rainy day. If you’re already saving to cover unexpected bills and expenses, consider ways to reach your goals faster. Set up automatic payday transfers through your online banking system and consider adding in at least some of any unexpected good fortune you receive. Stashing the cash out of sight and out of mind can protect it from itself.

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7 steps to saving money in an emergency fund

What not to forget

If you have variable rate lending products, be sure to contact your lender to see where you stand and what to expect. Home equity lines of credit (HELOCs) are often based only on interest payments, but all line of credit payments are affected by changes in interest rates. Given the expectation of a significant rate hike in mid-July, it would be wise to budget accordingly now. The same goes for an adjustable rate mortgage. If your payments were deliberately lowered, they could also be increasing.

What happens to adjustable rate mortgages and HELOC payments when interest rates rise?

With a fixed-rate mortgage, pay attention to your due date. Then your payments could increase. If you need to extend your mortgage in the next 12 to 18 months, plan a strategy with your lender to determine when an extension would be most beneficial to you.

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Also watch out for missing money. If you receive expanded health benefits at work, submit your receipts and receive the reimbursements you are entitled to. The same goes for your taxes. If you haven’t submitted yet and you’re likely due for a refund, take care of it sooner rather than later. If you keep purchases that you intended to return or send back to a store, take care of that too. Don’t leave money on the table if your employer offers an RRSP customization benefit. Check your budget to see how much you can contribute to your child’s RESP to make the most of the state grant.

There is so much to lose by not filing your taxes

July vs January – why now?

If you’re being honest with yourself, looking at your finances right after the winter and holiday season is over can be miserable. The days can be long and dark, punctuated by last-minute deals on sun-kissed destinations and emails telling us our credit card minimum payments are due. The slower pace of July compared to January is usually a good time to review how we’re managing our money and where we’re at. Our income taxes are filed. We have six months to plan how we can afford the happiest – and often most expensive – time of the year. And if you’re on a budget, July is a great time to suggest alternative Christmas gifts to your friends and family.

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9 alternative gift ideas

The conclusion of an effective mid-year financial audit

A mid-year financial report is often touted as a review of your investments. While monitoring your savings and investments should be part of a financial review, with the dramatic changes in the cost of living, it’s important to review other areas of your finances as well. How to spend your available funds, allocate your budget, and manage all your bills, expenses, and debts—get help if creating a new plan seems like a daunting task. A nonprofit credit counselor near you would like to help.

Related reading:

What does it mean to build an emergency budget?

5 money-saving tips to weather an economic downturn

How to be financially prepared for anything

Scott Hannah is President of the Credit Counseling Society, a non-profit organization. For more information on managing your money or debt, contact Scott by E-mailcheck over nomoredebts.org or call 1-888-527-8999.

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