Daily Money - Midyear money checkups are so brat

Hi y’all —

Can you believe we just passed the halfway point of 2024? 

Things are moving quickly. The presidential election is heating up, there’s a new House of the Dragon season airing, and we’re in the thick of Brat Summer. But in the wise words of Miley Cyrus, we can’t stop: We gotta keep this party going, and to do that we need to conduct a midyear money checkup.

Although the economic vibes are still off, in part because of the will-they-won’t-they situation we’re in with the Fed, this is a perfect time to get your financial house in order. I’m willing to bet some aspect of your life has changed since January, so update your plans. Crank up the AC, open your laptop and work one by one through the six tasks listed below.

By the end, you’ll be well-positioned to slay the rest of 2024. Here’s how to conduct a midyear financial checkup: 

✅ Revisit — or adjust — your financial goals

Gerald Grant, Jr., president of G Financial Group in alliance with Equitable Advisors, says a midyear checkup “gives you an opportunity to turn the clock back to January,” allowing you to stop and say, “This is what I said I wanted to do. Am I actually doing it?” 

Say you made a New Year’s resolution to save $500 a month in 2024. But seven months into the year, you’ve been unsuccessful in actually putting that cash away. This is your chance to reset. 

Maybe you need to recommit to the goal by reviewing your budget and finding places you can cut back (might I suggest axing unused subscriptions?). Or maybe you need to change your target and set a goal that’s more in line with your income.

✅ Update your emergency fund

Many experts recommend having three to six months of expenses set aside for a rainy day (unexpected job loss, car repairs, medical bills and so on). But that number isn’t static. The cost of your everyday life has likely changed in 2024, whether that’s due to rising grocery bills or increasing energy costs, so you might want to run your calculations again.

This is also a nice time to ensure your emergency fund is in the right place. The Federal Reserve still hasn’t slashed interest rates, meaning high-yield savings accounts and certificates of deposit (CDs) are still a pretty sweet deal right now. 

✅ Make sure you’re on track for retirement

When you’re dealing with the daily grind, it’s easy for retirement to sneak up on you: “No one thinks about retirement and five years go by, 10 years go by, and all of a sudden I’m 60,” Grant says.

Keep your eye on the ball. During your midyear checkup, Schwab suggests you verify that you’re contributing at least enough to your 401(k) to unlock the company match. Otherwise, you’re missing out on what’s essentially free money.

BTW, did you get a raise in the first half of the year? If so, bump up your retirement contributions. In 2024, you’re able to put up to $23,000 in a 401(k) or 403(b), plus $7,500 if you’re over age 50.

✅ Pull your credit report (for free)

Last year, the nation’s three major credit bureaus — Experian, Equifax and TransUnion — announced that they were permanently extending a pandemic policy that gave Americans access to free weekly online credit reports. This was a big deal because before COVID-19, you could only get one per bureau per year.

Looking at your credit report weekly is overkill, but the National Foundation for Credit Counseling’s Bruce McClary told me in Issue #208 that folks should “at the very least” pull it once a month to make sure the data on there is accurate. If you haven’t done this recently, now is the time. Head to annualcreditreport.com to get started.

If you see something unfamiliar or wrong, take action, because it could be a sign of identity theft. You can dispute credit report errors by reaching out to the bureau behind the report, telling them what’s incorrect and sharing proof to substantiate your claim.

✅ Review your tax withholding

Even though it feels like April *just* passed, taxes are a year-round issue. 

H&R Block suggests you check your withholding and make sure it aligns with your lifestyle and goals. The stakes are high: If you withhold too much, you’ll get less in your paycheck now but a bigger tax refund later on. If you withhold too little, you’ll get more in your paycheck now but could owe the IRS later on. 

It’s better to learn which side you’re going to fall on sooner rather than later so there are no surprises come tax time. If you need to change your withholding, you just need to file a new W-4 with your employer.

Speaking of paperwork: The Taxpayer Advocate Service also recommends you round up your records, tell the government about any name or address changes, set up an IRS online account and more as part of your midyear checkup.

✅ Start thinking about the holidays

I know it sounds presposterous, but we are a short 168 days away from Christmas. No matter how you celebrate, the holidays tend to be an expensive proposition: In 2023, consumers said they planned to spend an average of $1,652 on gifts, non-gifts and experiences.

Grant suggests you start preparing now, determining how much you’d like to spend and working backwards to put away a little each month. This way, he says, you’re “creating your own bank.” By saving up what you need for December and using those funds to pay your credit card bills, you’re avoiding the need to run up a balance with a high interest rate.