How to Perform a Successful Mid-Year Financial Review For Yourself in 2023

Who says you can only do financial reviews at the end of the year? Check in with yourself at the mid-point as well, to make sure you’re on the right track.

Despite pandemic-related circumstances, it’s always good to perform a financial review. Many assume that taking stock of their financial status at the end of the year is sufficient, but a mid-year review is just as important.

Checking in during the year’s midpoint is good for monitoring your progress in terms of spending habits, outstanding debt, any unaccounted tax liabilities, and assessing your investment portfolio. It allows you to apply a critical lens to what you’ve been doing well and identify areas for improvement.

Overall, it’s an optimal time to ensure you’re on the right track. So if you don’t intend to engage a financial advisor to assist you on this, here are a few guiding points for performing your mid-year financial self-assessment.

Pro-tip: People have likened financial reviews to an interview. So treat your self-assessment like a self-directed Q&A.

Table of contents

• Reflecting on goals and objectives
• Re-assessing budget
• Re-categorising savings
• Compiling a credit report
• Re-strategising investment portfolio
• Building retirement savings
• Tax-deductible expenses

How to self-assess your mid-year financial performance in 2022

#1: What goals and objectives have been met so far?

Source: Prudential Singapore; adapted from the Straits Times

Reflect on what’s been accomplished in the first six months: Have you been saving substantially? Have you been paying your bills and debt repayments on time? Are your income sources stable? Are your investments performing as well as expected?

Everyone’s financial goals are different. Whether it’s to save up for that HDB BTO, clear your credit card debt or simply accumulate wealth, they all require different (albeit overlapping) approaches. 

Hence, focus less on everyone else and concentrate on yourself instead. The only financial comparison should be with yourself from six months ago.

Consider producing a mindmap or flowchart up to your current progress. It should provide a good overview of which objectives you’ve been hitting and which have been overlooked. To further zero in on the nitty-gritty details, deconstructing the components into categories in an Excel sheet can help.

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#2: Always start with your budget

The foundation of a successful financial year heavily depends on your budget planning. But that’s the easy part. Sticking to it is the challenge. Moreover, unexpected life events can happen and cause your financial situation to change, derailing your budget-balancing attempts. 

This is why reviewing and updating your budget at the halfway point is crucial to realigning your objectives. It provides enough leeway for you to develop new strategies and set targets for the latter half of the year.

For instance, those with debt or loan repayments are highly encouraged to pay them off as soon as possible. If left unchecked, they can easily snowball and become unmanageable. 

With Singapore’s rising mortgage rates, many couples and families are looking to refinance their housing loans by switching their current one to another that offers lower interest rates. By thinking ahead like this, you can pre-emptively restructure your budget and refine your financial strategy moving forward.

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#3: Re-classify the needs and wants in your savings if needed

While we all know the importance of distinguishing needs and wants, sometimes the lines between them get blurred. 

To illustrate, internet connection is considered a basic necessity in this day and age. However, when the minutes bleed into hours as you stream your favourite Netflix series or game with friends, speedy internet service does seem like a luxury.

Thus, conducting mid-year reviews are key to identifying these problematic expenses and remedying solutions to cut back on unnecessary costs. This reduced expenditure could then be re-funnelled into growing your savings even more.

#4: Compile a credit report from your credit card and bank statements

Along a similar train of thought, reviewing your credit card and bank statements is essential to avoiding overdue payments. Compile all your credit payments into a credit report to get a cohesive overview of your entire credit history.

Your creditworthiness will be assessed via this credit report. Therefore, having a healthy credit report helps credit providers determine your loan feasibility more objectively and efficiently.

Furthermore, regular credit reviews also help identify any potentially fraudulent activity tagged to your credit card. For example, Credit Bureau Singapore has ‘My Credit Monitor’, which monitors your credit report daily and notifies you of any key changes detected. Early detection is ideal for preventing the loss of funds from identity theft.

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#5: Don’t neglect your emergency fund

We’ve all heard the advice to save up for a rainy day countless times. But how many of us take that advice seriously and build our emergency fund? 

Your emergency fund is your emergency cushion to fall back on when you’re hit with unexpected events in life. For example, getting retrenched is a common setback that many are unprepared for. 

Too many working adults become too comfortable with employment. They fail to account for the possibility of suddenly losing their job due to unforeseen circumstances like a pandemic. Once that active source of income is gone, your emergency fund will be your lifejacket.

Ideally, you’d want at least six months’ worth of salary stored in this emergency fund. 

Set it up in either a high-yield savings account or cash management account by robo-advisors. Both methods facilitate easy and efficient withdrawals thanks to their high liquidity. 

Make sure to automate the fund transfer process each month too so that poor financial discipline or accidental spending won't affect your savings.

Conversely, if your emergency fund isn’t sufficient or inflation has eroded it away, a personal loan is a possible option too. It's a quicker way to fulfil loan repayments within the span of a few interest-free months. But of course, taking a loan comes at greater risk once the grace period expires.

#6: Re-strategise your investment portfolio

54% of 1,000 Singaporeans expressed worry over their investment portfolio, reported OCBC’s COVID-19 Financial Impact Survey in 2020.

Investing is one of the key pillars of growing wealth. However, it’s also important as a passive income stream to combat the impact of inflation on your purchasing power.

There are multiple ways to invest — either concentrating all your eggs into streamlined baskets or diversifying and spreading them across many baskets. Although there is no right or wrong way to invest, experts recommend the latter method, especially for newbies. 

Diversification reduces your portfolio’s volatility and hence the potential risk. You won’t have to constantly fret over poor-performing assets as your remaining assets can help to cover the losses. 

This sentiment was corroborated by Prudential Singapore’s survey, which found more people diversifying their portfolios as a de-risking strategy. Blue-chip stocks and exchange-traded funds (ETFs) are good examples of stocks, equities and other securities known for steady dividends, low risk and overall stability.

Whether you want to be more conservative or aim high is up to you. Assess your personal financial situation before making an informed decision.

Pro-tip: If traditional investments aren’t your cup of tea, maybe alternative investments (e.g. cryptocurrency, NFTs, etc.) might strike your fancy.

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#7: Bolster your retirement savings with your CPF Special Account (SA) 

One of the unique things about being Singaporean is our mandatory social security savings scheme that channels employers’ and personal contributions towards our retirement funds — our Central Provident Fund (CPF). Specifically, we are encouraged to top up our CPF-SA under the Retirement Sum Topping-Up Scheme (RSTU) to earn greater returns and enjoy tax relief. 

The former refers to a 4% guaranteed, risk-free return with an additional 1% interest for the first S$60,000 deposit of combined CPF balances.

The latter refers to up to S$7,000 tax relief enjoyed (plus an additional S$7,000) when cash is topped up into both your and your partner’s CPF-SA accounts. Couples can earn up to S$14,000 in tax relief through this.

You can even aspire to follow the 1M65 movement, where couples aim to achieve a joint total of S$1 million across both CPF accounts by 65 years old, the statutory retirement age in Singapore. Recently, this movement has been revamped to the next milestone of 4M65, but that’s for another time.

Notwithstanding that, CPF-SA funds can also be strategically invested into approved investment schemes under the CPF Investment Scheme (CPFIS). For maximal returns, money from your CPF Ordinary Account (CPF-OA) of 2.5% interest can also be transferred — albeit irreversibly — to your CPF-SA. 

The bottom line is CPF is extremely versatile for both retirement savings and investments alike. Choose the plan that best fits your long-term trajectory.

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#8: Capitalise on your tax-deductible expenses

Did you know: You can donate money to get tax relief? Although philanthropy is altruistic and shouldn’t warrant a reward, being exempted from tax payments is always welcomed.

The criteria for tax-deductible donations are:

1. Cash donations or stocks listed on SGX or locally traded unit trusts
2. Approved by an Institution of a Public Character (IPC) or Singapore government
3. The recipient is of a local cause

Once you satisfy these pre-requisites, you are eligible for a 250% tax deduction. This means that you’ll enjoy a deductible amount of S$2,500 for a S$1,000 donation. Your annual tax assessable income will therefore go down by S$2,500 that year.

A few good things about tax deductions are that they’re ‘built-in’ and don’t require any claims to be made. They’ll be automatically calculated during your next year’s tax assessment.

Other more personal endeavours ensuring income tax relief include Course Fees Relief, Qualifying Child Relief and Grandparent Caregiver Relief.

For a more detailed rundown on important tax-deductible information, refer to this article.

#9: Comprehensive personal insurance

Having comprehensive personal insurance coverage is also really crucial. If applicable, you’d want to be covered on all fronts in medical, critical illness, personal accident, life insurance, and even home and car insurance.

Life is unpredictable, so ensuring all your bases are accounted for in any situation is important. The last thing you’d want is to be caught off guard and left defenceless. Thus, ensuring your insurance policies are up-to-date with the necessary coverage is crucial to your financial review.

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Is a mid-year financial review that necessary?

Well, it might not be necessary, but it sure is important. Like regular health screening, a mid-year financial review can be as useful. How often you perform it honestly depends on your personal financial situation and outlook. 

Conducting it twice a year is not a guaranteed recipe for financial success. However, the biggest concern is that most Singaporeans simply aren’t doing it enough.