Mid-Year Financial Reviews: An Easy and Fun Way to Tackle Them

It's June – the year is halfway over. Now is the perfect time to hit pause and do a mid-year financial review.

A midyear checkup is a great way to see how you're progressing with your goals and make sure that your money is working for you and your goals.

Today, we'll go over a system that makes it simple to set up and checkup on all your accounts including investments!

Mid-Year Financial Reviews

While we automate much of our finances, especially the tedious parts. It really does pay to have these times where you sit down. In review the numbers. And having a financial checkup mid year is a fantastic opportunity. Not just to look at your day to day accounts, like your checking and savings but your investments.

Having these more in-depth conversations. Can be beneficial to both your marriage and finances.

For us, this is an opportunity to hit pause and to really sit down and talk.

I don't know how this year has gone for you but it really has flown by for us. In overall, it has been good, but that doesn't mean there hasn't been some struggles and challenges that we face.

Second, it gives us a chance to talk about what's been working and what's not working with our family finances.

Life comes up and maybe we had to shift some things for a month or two. This is a pause where we can ask, Is this a trend that we should start planning for, or is this a one-time deal?

Knowing that ahead of time can relieve the stress going forward.

Finally, it's a great reminder to reflect on the big picture.

What are we really working towards and how are we aligned towards that?

Yes, it does involve looking at the finances, but also schedule wise, work choices that we make, time with the girls – all these things are connected to each other.

Having a set period where we can reflect on that big picture is a huge help.

This past year and a half can be especially challenging for families as we are navigating through this unprecedented time.

Which is why I'm glad Kevin Matthews is a part of this episode. He's a former financial advisor and a number one bestselling author.

He just had a new book from Burning the Blueprint that's out that you should definitely grab.

Today, we're going to be talking about that connection between your family and financial goals and making sure that your investments are moving in the right direction.

In this episode, we'll get into:

  • why investing matters and how you can come up with a plan that reflects your goals
  • how to do a financial review for your investments?
  • making sure that they're aligned with your priorities and goals.

Are you ready? Let's get started!

Resources to Stay on Top of Your Money 

If you’re looking to build up your finances, here are some handy resources we mentioned in the episode plus more! 

Thank You to Our Sponsor Coastal!

thanks to our podcast sponsor Coastal Credit Union. If you want to live better, you have to bank better!

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Investments: Making your Money Work for You

Elle Martinez: I want to talk to you a little bit from burning to blueprint, kind of start off there because you lay out how a family can start getting that financial stability and wealth using the SIP system.

First off, how important is it for families to include investments with their financial plan?

Kevin L. Matthews: Yeah, I think it's one of the most important parts, because when you invest, you are essentially electing to grow your money.

While savings accounts are always important, we're never not going to get away from that. That's the bread and butter, but we have to make sure that that money is growing so that it takes care of us.

The way that I like to describe it is when I'm investing, I'm sending my money to work.

I have a nine to five that my money needs to have a nine to five as well, and they need to bring home more money. The more often that we do that, the longer that we do that, the quicker that we can leave our own jobs, we can create financial freedom for ourselves.

Investing is just the process of giving your money, a job, allowing that money to go to work so it can take care of you.

Elle Martinez: I definitely agree. I feel like coming from a family where investments weren't talked about, there's there was like a lot of concern. It came from a good place, but they were hesitant about it. They thought, you know, is it really safe to invest?

They thought maybe real estate buying home was more of a financial priority.

I do want to talk to you a little bit about that. People's misconceptions about investing and some of the money scripts that they pick up that can show up with their financial decisions specifically with investing.

Have you seen some of these play out with families on deciding how to do it?

Kevin L. Matthews: Yeah, I have, especially around the tangibility of the stock market, meaning I would prefer to invest with something that I can feel, I can see that I'm sure it's not going to get up and walk away tomorrow. And I understand that.

My thing is to show that the stock market while not as tangible is still tangible.

If you invest in a target or a Starbucks, that you can walk into a target and a Starbucks and see that it is a real thing and that your investment is very much tied to the success of that company as a whole.

It's all about understanding that the tangibility part, but also easing into it. I think, especially for families too, to understand that you don't have to be an expert on day one is extremely important because that's where it gets intimidating that you feel like you have to have a finance degree from, from day one.

And that you had to be, you have to know every single thing all at once, and that's not necessarily the case.

You can start small, you can start with one company or one fund. I think an index fund is probably the best place to start just to just do that first and understand what type of investor you are and just take it step by step.

It may take a while. It may take several weeks. It can take several months and that's totally okay.

Elle Martinez: Yeah. I know a lot of people are hesitant.

And then this past year, maybe you've seen this too the other extreme where you have people who are eager to make their money work for them. But what they're doing is they want to jump into things because they see this crazy growth with cryptocurrencies or what's happening with AMC in GameStop, but they're not taking the time to understand, either the technology behind it or just the businesses.

What would you say to them?

Kevin L. Matthews: My thing is, and I've say this all the time is, don't let your emotions do not do math. I think that that's the key thing.

Most people take that to mean that you're falling in love with the company or a stock and it doesn't do well, but you're just hanging on to it but it also means that people who move anxiously and I feel a rush that I need to get into this.

I can't miss it. I can't miss it. I got to get into this now. I don't know what it is, but I have to get into this right now is also an emotion that doesn't always fare well for most investors.

So anytime that you're making a financial decision, you want to make sure you're doing it out of understanding and that you're doing it out of your own will and not because of an emotional push or just because you're chasing something that you think or feel that everyone else has.

I think that that's the key thing we see all the time that there are, there are some times where these well, we call meme stocks like AMC and game stop, a lot of times they have popped.

They have done extremely well and then shortly after they don't do so well.

We talk about those all the time, right? That this has been a recurring theme. All of 2021. We don't talk about how Kodak did something very similar and then Kodak very quickly lost more than 70% of his value within a week. Yeah. That's a risk that I don't think most people are willing to take.

We also have to pause and say, you know, there are some people who had their risk tolerance where they want to make, you know, hundreds of percent. Yeah. A hundred percent of the day and all that kind of stuff. But there are regular companies out there that have built wealth for generations and generations.

And those are okay too. You don't have to get everything overnight. I think that's the key thing, especially for beginners.

Elle Martinez: Yeah, consistency will Trump that anxious feeling where you cycle. I've seen people put money in their money, goes down, especially with cryptocurrency. I think even in the personal finance space, it was done as an experiment. So it wasn't a lot of money. And Bitcoin dropped and then, you know, A normal person would typically just take it out.

It's like, okay, I've lost money. And that cycle just really makes it worse.

I just want to fast forward for maybe a couple that they have been investing and they've put money into the 401k. How would they go with this process of reviewing their investments, making sure that it's on track? For example, like how do you and Jess review your investments?

You do it like twice a year, I think.

Kevin L. Matthews: Yeah. That's exactly right. So we do it at the end of June at the end of December. And that's it.

And what we, I think for everyone that the key is know what your goal is and know what the standard of the bar is going into it. I think that's the key thing. So for example, we do, what's called the rule of 110.

So you take 110 minus 30. That gives me 80. Right? So 80% of my 401k of all my investments should be in stocks. And 20% should be in bonds.

It's just a rule of thumb. So throughout the year, depending on how the market has performed, depending on how I've invested, that number could be out of whack, maybe it's it's 90 10 now because the stock market was great or maybe it's, you know, 70 30, because things didn't go the way we expect it.

What we try and do is say, this is what the bar is, is what we intended to go into the year with. This is where we should be. And then we go back and measure to see how close we are to that number.

If we're a little off by, let's say more than 5% or so that we make sure we come back in balance. So maybe we're adding more money to one to bonds and stocks and so forth to make sure we're properly allocated and properly balanced.

Then we come back and check back in on it at the end of the year.

Elle Martinez: Yeah. I think sometimes people. I think it has to be very complicated or they see on television, like they have to have a ton of spreadsheets and yeah, spreadsheets are a part of it, but nowadays there's a lot of apps and tools that make it easy to grab the numbers.

Kevin L. Matthews: Yes and that's the thing, too. So for example, especially if you're talking about your 401k or even a regular brokerage account, usually when you log in, it gives you a pie chart that shows you now the words are a bit different. They'll say, domestic stock or fixed income or something like that.

Usually that number is readily available and it'll tell you flat out. Yeah, you have X percent here and X percent there and it makes it a lot easier nowadays than what it used to be.

Elle Martinez: Yeah, I do like that. There are more tools. Sometimes though I think certain apps make it easy to invest, but they don't do the education side as well and some people get burned by that.

But I love how you do that you have a plan and then you measure it up against it. It's not that complicated.

You guys already talked about this before and how often do you and Jess kind of go over the big, big picture, like your plans for 10 years or 20 years down the road. How often do you guys kind of review that and adjust?

Kevin L. Matthews: Yeah. So we have a living document for our 5 10, 15, 20 years. And that's the one where we generally review once a year and the way that we break it down is, let's say for the five-year goal, we put up what the goal is.

It has actually the most detail and the further out it goes, the less detail it has, because there's only so much, you can play into a detail, right?

We work backwards and break those down. They'll try to break those down into monthly goals. And on the first of the month we just quickly review and say, okay, have we started this part of it?

Have we started that part of it and kind of move on? For example, I think back in 20 15 or so I was looking at grad school. We said, okay, by 2020, we want to make sure that we graduate on or about this date.

Then we start to work backwards and say, well, now we need to buy the study book. Now we need to consider scholarships. Now we need to consider what schools we want to apply to and broke that down year by year.

We ended up graduating in 2020. We did not expect the pandemic there, but you know, you have to, yeah, they got to figure your way around those things. But it's we review those once a year.

Then at the top of the year, every year we prioritize and say what's the most important and then break those out by month and sometimes by quarter

Elle Martinez: yeah. I love that and you're right -no one planned for the pandemic and, and everything that happened in afterwards, but it does bring up a good point.

If you could say a silver lining or a plus about it is that it's given us more time at home with the kids or reflecting, you know, what kind of legacy or what kind of lessons we want to pass on to our kids.

You're known for taking a long-term approach when it comes with finances specifically, I saw your article about building generational wealth.

I'd love to get your take on both sides of the coin. One, the lessons your parents passed on to you. And then what key lessons you want to pass on to your two kids?

Kevin L. Matthews: Yeah, I would say for me, there were a few lessons that I learned. I think the first one is that investing is, should be prioritized and is important.

So my parents did not actually invest in the stock market. When I was growing up, it was less accessible. A lot of people who look like us and just didn't really know that it existed.

And there wasn't like a Robin hood or a fidelity app back in the day. But what my parents did do, especially my dad is he, he was a someone who rented property.

He was a firefighter and he would go to a firefighters auction and buy cars for thousand dollars, $1,500 and then fix them up and then sell them for a lot more.

That was my first introduction to like what investment was, what investing was rather and how it can work for you outside of just having your regular nine to five.

I think that's where I got that, that business acumen from and where I got the the idea that there, there might be an even better way for me to do this without like, you know, worrying about title Jansport and all that kind of stuff that you have to worry about with buying a house or a car.

So that's the first one. The next one is, is being flexible and resilient financially. Because everything, like you said is not going to come out the way you expect it to a lot of hurdles that we all run into, especially as parents that you want to do X thing. And then this thing happens and you have to adjust everything all over.

I was so grateful that my parents were always transparent financially and say, look, you know, we can't afford this. We're gonna have to wait until tax time. Right. Or, Hey, this bill was really expensive. We have to reschedule this trip or something like that. While it wasn't always a fun conversation per se, it was transparent.

It's that communication is what I brought into my marriage and what I hope to bring to my kids too, that we can talk about the positive things that we're trying to do and, and negative if that should occur and let them know that it's not something I need to be ashamed about. Is that something I should hide and not talk to talk about so the people who are most important to me,

Elle Martinez: Yeah. I love how not only are you having these conversations with your kids, but you and your wife have started investing on their behalf. So when they are 18, they're starting on a strong foot financially speaking. So they have choices and opportunities. What made you and just decide to do that?

Cause I know a lot of parents have the idea. They want to do this but we get pulled in so many different ways so how did you guys make this a priority? What discussions did you have?

Kevin L. Matthews: Yeah, it was more of a reflection on my end that that kind of spurred it. So my origin story, if you will, into the financial space was in 2010. I flew to New York and did the internship on wall street. And it was, I was utterly floored. Like I didn't understand the market. I was confused, flustered and everything that they could go wrong.

They go wrong in terms of like, What an intern is supposed to do. Cause I had no prior training about the stock market at all.

But it was like second to last day and I realized that we did what's called backtesting. So essentially what if you invested a thousand dollars in apple in 1989 or something like that, and then it would spit out a number and say you could have been rich.

I essentially found out that had my parents invested a thousand dollars a year, which is just $83 a month in apple for the time I was born in 2010, I could have like $800,000.

Yeah and that was the moment I was like, oh my God, everybody should, should know about this. And whenever I had kids and this was, you know, 10 years before I even had kids, I was like, I want to make sure that my kids never have to wonder, like, what if dad or mom invest in X, Y, and Z.

So that was it. When we found out we were having kids. First thing I did was open a savings account clearly that we, his name wasn't on it at that point in time that wanted to make sure like, look, the first thing I do when we leave this hospital is we're opening an account and we've got to start this now.

Like, even if it's a little bit of money, he'll have way more than I would've ever imagined.

What happened in reality was I went downstairs while my my wife was in labor and I didn't know she was going to have the baby within 10 minutes cause I was like, look, it's going to be like several hours.

I'm like, okay, great. I'm gonna go down to the lobby. I'm gonna record this video real quick. And I came, I, you know, recorded the video. I don't know, two or three minutes long about the things I was going to do to ensure that just my son at that point in time. Cause my daughter wasn't born yet, but what we're going to do to build generational wealth, get back on the elevator, get back up there.

And like, they're like, oh, the baby's coming now. And ten minutes, when he

Elle Martinez: Wow.

Kevin L. Matthews: So, so yeah. You know, I never made that mistake again, but I almost missed it. So yeah, that was the thing I wanted to make sure that my kids never had to wonder what is and have labs.

So both of my kids now have, at this point have more money than I had at 18, which, you know, I had a part-time job.

I was working left and right. I had been working at a gas station since I was 16. And because of investing, they've already leapfrogged me at where they are age wise to where I was when I was 18.

Elle Martinez: Yeah, And your kids are small.

Kevin L. Matthews: Yeah. Yeah. Yeah. So they're at this point at nine months and three years old,

Elle Martinez: Oh my goodness. But that that's something parents would love to be able to do. I'm glad that you pointed out it doesn't take a huge investment.

Kevin thank you so much for coming on. I really appreciate this and congratulations on the book. I mean, best-selling, it is a fantastic read, more importantly definitely one of those that makes you think and come up with a plan for your family and your legacy, but also the community.

Kevin L. Matthews: thank you. I really appreciate that.

Support the Podcast!

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Music Credit

Our theme song is from Staircases. Additional music by various artists from Audiio.

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