How to Do a Mid-Year Financial Checkup in 6 Simple Steps

Couple drinking coffee while looking at their finance checkup

It’s that time of year. Summer’s in full swing and the first half of the year is behind us. So, how’s your financial health? While a financial checkup probably isn’t the first thing on your mind once the warm weather hits, the halfway point in a year is the perfect time to do a quick review of your financial situation. Reflect on what’s behind you and plan for what’s ahead. You can make any necessary tweaks to your savings strategy, debt repayment plan or budget — and still make traction over the next six months to achieve your financial goals before the year ends.

A mid-year financial checkup doesn’t need to be a huge time investment (it is summer, after all) and it can be done in six simple steps. Let’s get started.


  1. Compare what you own to what you owe


Otherwise known as calculating your net worth, this is your chance to gauge your overall financial health. Is your net worth positive or negative? Is it growing or shrinking over time? The calculation is simple:

Your Financial Assets – Your Financial Liabilities = Your Net Worth

Assets will include your checking and savings account balances, the market value of your house or condo, RRSPs, GICs, TFSAs, etc. Liabilities include any outstanding personal or mortgage debt, child support, alimony, bank loans, federal or provincial student loans, etc.

You can simplify this task by using this net worth spreadsheet from the personal finance website Squawkfox.


  1. Review and revise your financial goals


Goals, resolutions, promises…whatever you call them, it’s a good idea to check in regularly to track your progress. Are your goals still relevant and realistic? Check in on savings, debt repayment, promises to change spending habits, etc. If you haven’t made the progress that you expected, dig a little deeper and find out what’s been getting in the way. Have your expenses gone up or your spending habits changed?


  1. Plan ahead for the rest of the year


The idea here is to avoid any unexpected and unwelcome financial surprises over the next few months, if you can. For example…

  • Make sure you have a summer spending plan in mind (or on paper), because it’s so tempting to splurge beyond your means at this time of year.
  • Take note of any big expenditures coming up. Replacing a vehicle or fixing a leaking roof can hit your budget hard even if you’ve planned for it.
  • Will you need to make any important money decisions this year? Maybe you’ve decided to switch jobs, buy a home or move to a different city or province. Your mortgage may be coming up for renewal or your spouse is starting maternity leave.
  • What’s on the calendar for the rest of the year? Back-to-school costs, kids’ extracurricular fees, birthdays, weddings, holidays, vacations and the like — it all adds up. Consider setting up a separate savings account for irregular expenses, like vacations, birthdays and holidays. The more you can save ahead of time, the less likelihood you’ll rely on credit.


  1. Check in on your debt


If you’ve figured out your net worth, you already know how much you owe. But what’s your plan for repaying that debt? Make sure you have a debt repayment strategy that works for you and motivates you. What about your credit behaviour? Are you relying on credit cards or payday loans to make ends meet?  Be on the lookout for warning signs of debt problems.

Finally, don’t wait to get help if you’re having trouble managing your debt. A Licensed Insolvency Trustee (LIT) will meet with you initially for no charge and no obligation on your part. An LIT will make sure you understand all available debt solutions and help you choose one that fits your situation.

Here’s a deeper look into what happens when you meet with an LIT.


  1. Refresh your budget so you’re ready for your next financial checkup


You’ve reviewed and reassessed, now it’s time to refresh. Ask yourself, Is my budget still working for me? You may need to cut out some expenses altogether, or rethink how you allocate them in your budget. For example, you might need more to spend on groceries but less to spend on cable. You’ll be in much better shape at the end of the year if you have a plan in place that works for you, and balances your income, spending, debt repayment, savings and other financial obligations and goals.


  1. Check your credit score


This is an integral part of any financial checkup because your credit score is an indication of your financial health. A good credit score shows lenders that you’re a low-risk borrower and that you use credit responsibly. A not-so-good credit score means you need to look a little deeper in your credit report. Once you understand what’s lowering your score, you can take the necessary steps to improve it. Checking your credit score regularly also alerts you to errors, fraudulent charges and identity theft.

The good news is, there’s more than one way to check your credit score for free. And it’s simple. Your bank may offer this service, or you can go to an online personal finance company like Credit Karma or Borrowell. You can also get a free copy of your credit report by mail once a year directly from credit reporting agencies Equifax and TransUnion.


What do you include in your financial checkup? Share your ideas with us on Facebook or Twitter. #FinancialWellness #LeaveDebtBehind