Check your financial progress at the halfway mark with a review of budget accuracy, savings rate, investment performance, tax withholding, and debt reduction goals.
Compare January-June spending to your budget in every category
Pull 6 months of bank and credit card transactions and categorize them. If any category is more than 10% over budget, investigate why and adjust either the budget or the spending pattern.
Identify the three biggest budget overruns
Common mid-year surprises include dining out (averaging $300/month vs a $200 budget), subscriptions creeping up, and unplanned home or car repairs. Address each one specifically.
Adjust your budget for the remaining 6 months
If you overspent by $2,000 in the first half, you need to cut $333/month for the remaining 6 months to hit your annual target. Be realistic about which categories can absorb cuts.
Savings Rate Check
Calculate your year-to-date savings rate
Divide total savings and investment contributions by gross income for the first 6 months. If you are targeting 15% and currently at 10%, you need to save 20% in the second half to hit the annual goal.
Verify your emergency fund is still at 3-6 months of expenses
If you tapped your emergency fund earlier this year, create a replenishment plan. Set up automatic transfers of $200-500 per month until the fund is restored to target level.
Increase automatic savings by at least $50 per month
Small increases are easier to absorb. Moving from $500 to $550 per month in savings adds $600 per year. Most people do not notice a $50 change in their monthly spending capacity.
Investment Review
Check your portfolio allocation against your target
After 6 months of market movement, your allocation may have drifted 3-8% from your target. If your target is 70% stocks and 30% bonds, you may be at 75/25 after a stock rally. Rebalance if off by more than 5%.
Review investment fees across all accounts
Check the expense ratios of your mutual funds and ETFs. Switching from a fund charging 0.75% to one charging 0.05% saves $700 per year on a $100,000 balance. Look for identical index funds with lower fees.
Confirm retirement account contributions are on track for max
The 2024 401(k) limit is $23,000 ($30,500 if 50+). At mid-year, you should have contributed roughly $11,500. If behind, increase your contribution percentage for the remaining pay periods.
Max out IRA contributions if not already done
The 2024 IRA contribution limit is $7,000 ($8,000 if 50+). You can contribute anytime before the April 15 tax deadline, but contributing earlier gives your money more time to grow.
Tax Withholding Review
Use the IRS Tax Withholding Estimator with year-to-date pay stubs
The estimator at irs.gov/W4App tells you if you are on track for the right refund or if you will owe. A refund over $1,000 means you are overwithholding and giving the government an interest-free loan.
Adjust W-4 if your withholding is significantly off
Major life changes like a new job, marriage, or new baby affect your tax liability. Submit an updated W-4 to your employer. Changes typically take effect within 1-2 pay periods.
Review estimated tax payments if self-employed
Quarterly payments are due April 15, June 15, September 15, and January 15. If your income has changed significantly from your estimates, adjust the September and January payments to avoid underpayment penalties.
Debt Progress and Insurance Changes
Calculate total debt paid down in the first 6 months
Compare current balances to January 1 balances for each debt. If you are using the avalanche method (highest interest first), confirm you are making extra payments to the right account.
Check if any debts qualify for refinancing at a lower rate
If interest rates have dropped since you took out your loans, refinancing could save thousands. A 1% rate reduction on a $200,000 mortgage saves roughly $120 per month or $43,000 over 30 years.
Review any insurance changes or life events since January
Marriage, a new baby, a home purchase, or a salary increase may require insurance adjustments. You have 30 days from most qualifying events to update health insurance outside of open enrollment.
Six-Month Projections
Forecast large expenses expected in the next 6 months
Include holiday spending ($1,000-1,500 average), property taxes, insurance premiums, car registration, and any planned purchases. Set aside money now so these costs do not derail your savings goals.
Set or revise 2-3 specific financial goals for year-end
Goals should be measurable, such as pay off $5,000 in credit card debt or save $3,000 for vacation fund. Write them down and review monthly. People who write goals are 42% more likely to achieve them.
Schedule your next financial review for December
Block 2-3 hours on your calendar in early December for your year-end review. Doing it before December 31 gives you time to make tax-loss harvesting moves, max out retirement contributions, and use FSA funds.
Frequently Asked Questions
What should I check during a mid-year financial review?
Focus on five areas: compare actual spending to budget and adjust categories that consistently run over, verify you are on track for annual savings goals (divide targets by 2 and compare), check investment allocation has not drifted more than 5% from target, run a tax projection to see if withholding needs adjustment using the IRS Tax Withholding Estimator, and review progress on any debt payoff or net worth goals set in January.
How do I know if I need to adjust my tax withholding mid-year?
Use the IRS Tax Withholding Estimator at irs.gov to compare projected withholding against your expected tax liability. If you owe more than $1,000 when you file, you may face underpayment penalties. Common triggers for mid-year adjustments include a spouse starting or stopping work, investment gains or losses, rental income changes, or a side hustle earning more than expected.
When is the best time to rebalance my investment portfolio?
Calendar-based rebalancing (annually or semi-annually) works well for most investors. The mid-year point is a natural trigger. Threshold-based rebalancing (when any asset class drifts 5%+ from target) is more responsive to market swings. For taxable accounts, pair rebalancing with tax-loss harvesting to offset gains. In tax-advantaged accounts like 401k and IRA, rebalance freely since there are no tax consequences for trades within the account.
Should I adjust my budget if I get a mid-year raise?
Before increasing spending, direct at least 50% of the after-tax raise increase toward financial goals: boost 401k contributions, accelerate debt payoff, or increase emergency fund savings. This prevents lifestyle inflation from consuming all income gains. For example, a $5,000 raise yielding $300/month after taxes could split $150 toward retirement savings and $150 toward discretionary spending.