Why a midyear financial checkup makes sense

Every December, countless articles encourage investors to conduct a year-end financial review. While that’s valuable advice, the end of the year is also one of the busiest times for families and business owners.

That’s one reason a midyear financial checkup can be so beneficial. Summer often provides a natural opportunity to step back, evaluate your progress, and adjust before the year gets away from you.

1. Revisit your goals
Has anything changed over the past several months that could impact your financial plan? A new job, retirement, growing family, business changes, or other major life events may warrant revisiting your goals and ensuring your investment strategy still aligns with them.

2. Review your spending and cash reserves

Compare your current spending with your budget and savings goals. Inflation, unexpected expenses, or major purchases may have affected your cash flow or emergency reserves. A midyear review can help identify any adjustments needed before those changes become larger issues.

3. Reevaluate your risk tolerance
Recent market volatility provides a good opportunity to ask whether your investment portfolio still matches your comfort level with risk. Your tolerance may have changed over time, and it’s important that your portfolio reflects both your long-term goals and your ability to stay invested during periods of market uncertainty.

4. Review loans and debt
Interest rates and lending conditions continue to evolve. Whether it’s a mortgage, business loan, line of credit, or other debt, now is a good time to review your obligations and determine whether refinancing, restructuring, or accelerated repayment strategies could benefit your overall financial picture.

5. Consider rebalancing your portfolio
Market gains and losses can cause your investment allocation to drift from its intended target. Rebalancing helps ensure your portfolio remains aligned with your goals, time horizon, and risk tolerance rather than allowing market movements to dictate your investment mix.

6. Look for tax planning opportunities
Tax planning isn’t just a year-end exercise. A midyear review may reveal opportunities to harvest investment losses, adjust tax withholding, review estimated tax payments, or explore other strategies that could improve your tax situation before year-end. Working with your financial advisor and tax professional can help determine what makes the most sense for your circumstances.

7. Put excess cash to work

Many investors keep more cash on hand than they need for emergencies or short-term expenses. Reviewing your cash holdings may uncover opportunities to earn a more competitive return while still maintaining appropriate liquidity.

Looking ahead

Every financial situation is unique. If you own a business, for example, your review may also include cash flow, succession planning, retirement plans, or other strategic considerations.

Financial planning isn’t about reacting to markets—it’s about making sure your financial strategy continues to support your goals, your family, and the life you want to live.

A few thoughtful adjustments now can help you move through the rest of the year with greater confidence and ensure you’re on track toward your long-term objectives.

Thomas M. Dowling, CFA, CFP®, CIMA® is the Head of Wealth Management at Alliance Global Partners of the Lowcountry on Hilton Head. He can be reached at infohh@allianceg.com or (843) 420-1993.