Your New Summer Tradition – A Mid-Year Financial Checkup

July 28, 2020

It seems crazy, but 2020 is more-than-half over, and what a year it’s been.The world we live in now seems completely different than the one we had in January. We began this year with a few columns about getting a handle on your finances. Maybe you have, or maybe you are working on it, or maybe it was just got lost in the pandemic and lockdown. Regardless, now is a perfect time to revisit and check up on those goals we prepare for the second half of the year.

A suitable place to start is with your 2019 taxes. By now you have most likely filed them, although the filing deadline has been extended until July 15. If you received a large refund, consider reducing your withholding. If you had to pay additional taxes when you filed, now is an appropriate time to increase your withholding, and look at ways to reduce your tax burden in 2020. You could sell positions in your taxable accounts for which you have losses. You can use those losses to offset any capital gains you have this year, and if your losses exceed your gains, you can write off the losses against ordinary income, up to $3000 per year.

Check your retirement plans. How are you doing on your retirement savings goals? If you are contributing the maximum to your employer’s plan, now may be an appropriate time to consider making contributions to an IRA. Depending on your personal circumstances, a Roth IRA might make sense too.

Increasingly, our health insurance costs are tied to our overall health. The beginning of the second half of the year is a great time to go for a physical. Many health insurance plans allow one check-up per year.

With the data from the first half of the year available to you, look at how and where you spent your money. If you have outstanding debt, have you been able to pay some of it down? Consider your spending and look for places to cut.

Maybe one of your goals for 2018 was to build your emergency fund. If so, have you made progress? Once you have three to six months of expenses socked away in a savings account or similar vehicle, you can deploy future savings to paying down debt, retirement savings, or investing.

If you are saving for college education, check your progress against your goal. Many colleges and university will have announced their tuition rates for the fall. Check to see if your estimates are realistic. Review your asset allocation for these accounts to make sure that the risk you are taking matches up with the timeframe/age of your prospective student.

Maybe you had some shorter-term items you were saving for during the first half of the year, such as a car or a vacation. If you’ve met those goals, consider redeploying those savings dollars to your emergency fund, paying down debt, or investing. If you have paid of a loan such as a car loan, consider continuing to make those payment to a separate savings account to save for the next time you need a new car. This will change the dynamic from borrowing for the purchase to using dollars you’ve already saved.

Finally, work on putting a system in place to guide you in your financial reviews. Address areas of weakness. For example, if you have no idea how you spend your money, consider using an app or program to help you track it.

As always, financial planning and management can seem daunting and overwhelming. Concentrate of making small, measurable steps each month. You might be amazed at how quickly you are able to make meaningful changes to your financial life.

To hear the podcast of the Smart Money Management radio show on this topic, or others, go to our website at

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

LPL Financial, Alderfer Bergen & Co. and their affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Securities and financial planning offered through LPL Financial, a registered investment advisor.  Member FINRA/SIPC