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  • Writer's pictureLeyder "Aiden" Murillo, MBA

Mid-Year Financial Review: Staying Afloat in 2023's Economy

Updated: Aug 24, 2023


Navigating Mid Year Financial Review: Staying Afloat in 2023's Economy

Hello there, friends! Your friendly neighborhood wealth management advisor, Leyder "Aiden" Murillo, is here. As the Founder and Managing Member of Wolfpack Wealth Management, I'm thrilled to bring you the latest from our Money Howl Blog. We aim to keep you updated on the ins and outs of your finances, whether you're an educator, a sprouting professional, a part of a dynamic duo (married couple, that is), or a small business owner looking to grow.


Halfway through the year, we're navigating through rough tides thanks to a dynamic equity market and rising interest rates. But don't let the stormy weather unnerve you! You're the captain of your ship, and with some proactive steps, you can keep your financial planning journey on course. The mid-year point is a perfect compass for reflecting on the journey so far and recalibrating for the journey ahead.


Checking the Compass – Your Budget

You don't start a journey without a map or run a ship without a budget. If it's been a while since you've glanced at your budget, it's time for a reality check. Given the inflation, even your daily essentials might be pricier.


Take a moment to reflect - is there an area where you're overspending? You might need to adjust your sails to navigate through these higher costs.


And what about big-ticket items? Have you encountered any unexpected expenses recently or anticipate any in the near future? Adjusting your expenditures elsewhere can help weather these storms, keeping your emergency fund intact and your savings goals on track.


Day-to-day routines also make a big wave. If you've picked up a new exercise regimen, adjusted your diet, or explored a new hobby recently, these can all tweak your spending habits.


Navigating Tax-Advantaged Saving

Despite inflation's adversities, it does come with a silver lining - you can now save more in tax-advantaged accounts like 401(k)s and health savings accounts. The annual contribution limit to these types of accounts has increased for 2023. Are you leveraging this opportunity? If you're 50 or older, don't forget about the catch-up provision, which helps you amplify your savings even further.


Charting Your Cash Course

Keeping all your funds in a traditional savings account might not be the best strategy. Considering the high interest rate climate, switching some funds to a money market fund or a certificate of deposit (CD) could be beneficial. But remember, while a six-month or longer CD might provide attractive returns, it's crucial not to lock up funds you might need on short notice.


Tackling Investment Account Volatility

With the choppy market seas, ensuring your investment portfolio stays afloat is vital. As market values oscillate, some positions may inflate beyond your risk tolerance. Periodic portfolio rebalancing helps maintain your desired asset allocation, thus promoting portfolio diversification and smoothing out market volatility impacts.


As we sail into a new phase of the economic cycle, the Fed's emphasis on taming inflation suggests likely continued rate increases. As businesses and consumers adjust to these realities, the economy might slow down, making a more defensive portfolio tune-up advisable.


Your Takeaways

While the summer sun might be calling you, dedicating some time to your mid-year financial review can be a game-changer. This proactive approach can provide the financial flexibility you desire, helping you sail smoother seas. So friends, let's keep those financial ships in shape and continue our journey to prosperity.


Remember, whether you're in Denver, Los Angeles, or anywhere across the country, Wolfpack Wealth Management is here to support your wealth management voyage. As always, we remain committed to making wealth management accessible and tailored to your needs. Stay tuned to The Money Howl Blog for more tips and advice. Smooth sailing, friends!

 

Ready to take control of your financial future? Schedule your free financial assessment and discover how working with a wealth management advisor is accessible and helpful in reaching your financial goals. Start building the future and wealth you deserve.


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