By: Sean Gallagher, CFP®
May is a great time to step back and take stock of your personal finances. The rhythm of tax season is behind you, and there's still plenty of time left in the year to make strategic adjustments. Whether working toward long-term goals or simply staying organized, a thoughtful financial check-in can help ensure you're on track and making the most of your resources.
1. Reassess Your Savings Goals and Progress
Savings are the foundation of a healthy financial life. Start by reviewing your existing balances and asking whether your current contributions align with your goals.
What to Assess:
Emergency fund: Do you have 3–6 months of expenses saved?
Short-term savings goals: Are you on pace to meet upcoming expense goals like travel, home upgrades, or tuition?
Retirement savings: Are your contributions on track to meet your annual targets (e.g., 401(k), Roth IRA)?
HSAs and FSAs: Have you contributed as planned, based on expected medical expenses?
Planning Ideas:
Refocus on goals - Revisit the timeline for short-term goals and adjust savings amounts accordingly to avoid needing to borrow when the time comes.
Automate your savings - Setting up recurring transfers to a savings account makes it easier to stay on track and removes the guesswork. View savings as fixed monthly expenses like car insurance or internet bills.
Adjust your contribution rate - If your income has increased or your spending is under control, consider raising the percentage you save each month.
Optimize idle cash - If you're holding more in checking than needed, consider transferring excess funds into a high-yield savings account or taxable investment account for better growth potential. Use savings accounts for short-term savings and investment accounts for long-term savings.
2. Evaluate and Strategize Around Debt
A proactive approach to managing debt can improve cash flow and reduce stress. Reviewing your debt profile now allows you to make meaningful changes before year-end.
What to Assess:
Current balances: Review all outstanding debts—credit cards, student loans, mortgage, and auto loans.
Interest rates: Are any debts particularly costly or potential for refinancing?
Debt-to-income ratio: Is your current debt load appropriate for your income level and financial goals?
Planning Ideas:
Refine your repayment strategy - Consistency matters when using the avalanche (highest interest first) or snowball (smallest balance first) method. Choose the method that keeps you motivated and saves the most interest.
Use windfalls strategically - If you've received a bonus, tax refund, or other lump sum windfall, consider allocating a portion to pay down high-interest debt.
Explore refinancing - With interest rates still in flux, it may be worth reviewing whether student loans, personal loans, or even your mortgage could benefit from refinancing or consolidation.
Be mindful of variable rates - If you carry any debt with a variable rate, such as a HELOC or credit card, pay close attention to rate changes and prioritize paying those balances down.
3. Review Your Investment Contributions and Strategy
Even if you don't follow the markets daily, checking how your investment strategy supports your goals is essential. This review is less about reacting to market movement than ensuring your plan works.
What to Assess:
Contribution progress: Are you consistently funding retirement accounts, taxable brokerage accounts, or education savings plans?
Asset allocation: Has your portfolio drifted from your intended mix of stocks, bonds, and other assets?
Tax efficiency: Are you managing your accounts with tax strategies in mind, including appropriate asset location and potential loss or gain harvesting?
Planning Ideas:
Boost contributions - If you have room in your budget, increasing contributions to your retirement or brokerage accounts can improve long-term outcomes and ease year-end catch-up pressure.
Rebalance your portfolio - Review your asset allocation to ensure it still aligns with your risk tolerance and goals. Market fluctuations can cause unintended shifts that may need to be corrected.
Review tax strategies - Assess whether there are opportunities to harvest tax losses or strategically realize capital gains.
Align account types with tax impact – When possible, make sure tax-inefficient investments (like taxable bonds) are placed in tax-deferred accounts. In contrast, tax-efficient investments (like index funds) are used in taxable accounts.
Bringing It All Together
Assessing your savings, debt, and investment strategy isn't just a financial exercise—it's a way to reconnect with your broader goals and values. This review can also help you identify overlooked opportunities, anticipate upcoming expenses, and make informed decisions that keep you on the path toward long-term success.
If you'd like a second set of eyes on your plan, or if you're unsure about what adjustments might make sense, we invite you to schedule a meeting with your HIGHLAND team. We're here to help you review your progress and fine-tune your strategy so the rest of your year moves forward with purpose and confidence.
The foregoing content reflects the opinions of Highland Financial Advisors, LLC, and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions, or forecasts provided herein will prove to be correct.
Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses, which would reduce returns.
Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful or that markets will act as they have in the past.
Sean Gallagher is a CERTIFIED FINANCIAL PLANNER™ at HIGHLAND Financial Advisors, a Fee-Only financial planning firm that offers comprehensive financial planning, retirement planning, and investment management. Sean graduated from Virginia Tech’s financial planning program in 2018 and successfully passed the CFP® national exam in 2019. As a Financial Planner at HIGHLAND Financial Advisors, Sean works on developing comprehensive financial plans and investment management for all clients.