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Now's a good time for a personal finance checkup

The midpoint of the year is always a good time to evaluate whether you're on track to meet your financial goals.

With the U.S. economy being assaulted on multiple fronts, it is even more vital to run a fine-tooth comb through your financial practices and projections.

These are key questions you should be asking:

Where's your money going?

"It means taking stock of what's coming in and what's going out on a monthly basis," said Michael Eisenberg, a member of the American Institute of Certified Public Accountants' National CPA Financial Literacy Commission. "Things cost so much more today. We didn't have these kinds of expenses a year ago."

Case in point: U.S. consumer prices rose in June at their fastest annual pace in nearly two decades.

"It's very important to see if we need to cut in other areas," Eisenberg said.

Try to project what your monthly spending will be.

"What do the next two years of living expenses look like?" asked Rick Salmeron, a certified financial planner at Salmeron Financial Network Inc. in Dallas. "Is your income sufficient to anticipate these expenses? Are there spending vices and habits that you need to eliminate for a while, if not permanently?"

Are you on track to cut your debt?

Paying off credit card debt is one of the smartest moves you can make, and it's especially important today, when job security is shaky.

"With credit, we promise to repay debt with income we have yet to earn," said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. "Having no debt provides freedom to use future income as you see fit."

If you should need to borrow money, being debt-free raises the chance of your getting a loan in today's tight credit environment. Lenders want to see someone with a high credit score and solid record of managing debt.

Have you built a nest egg?

First, take a look at having enough cushion to cover current expenses.

The standard advice is to have three to six months' worth of living expenses in an emergency fund, but given rising costs, you may need to put away more.

"If they don't have that minimum, they must go back to their spending review and see where they can start building," Sal-meron said.

You can't control what's happening to the larger economy, but you can control the financial direction of your world.

"If we have a safety net, then we don't have to panic and say, 'Oh, my God, I lost my job. What am I going to do?' " Eisenberg said.

Are you saving enough to reach your retirement goals?

Don't let the stock market's volatility shut down your investing for retirement.

"Given recent declines in the stock market, contributions into your 401(k) for the remainder of the year are actually even more important because your dollars will buy you more shares, since they are cheaper," said Bryan Clintsman, certified financial planner at Clintsman Financial Planning in Southlake, Texas.

"Partly because investments are cheaper right now, and partly because most Americans are behind on their retirement savings, the last thing you want to do right now is to pull back or cease contributions to employer 401(k) plans and IRAs," he said.

If you can't afford to max out your 401(k), at least save enough to get your employer's matching contribution. That match is free money, so don't leave it on the table.

Are your investments still diversified?

Diversification helps you weather the volatility in the stock market because all your money isn't tied up in one investment.

"In a market like this, many of your asset classes may be down, so if you're diversified, chances are you will find a winner somewhere," Salmeron said.

Do you need to tweak your investment portfolio?

That's called "rebalancing," which means adjusting the investments that may have fallen out of whack with your goals and tolerance for investment risk.

"Over the course of time, as different asset classes perform differently, going up and down, your portfolio mix changes," Salmeron said.

Do you need to adjust for income tax?

If you're going to be making less money this year than you had anticipated, you may need to adjust how much money you're sending to Uncle Sam in the next six months.

If you work for a company and discover that you will be making less money this year, take a look at your W-4 form and consider whether you need to adjust it to withhold less for income taxes.

While you shouldn't let tax considerations be the primary driver of investment decisions, if you have been thinking about selling a successful investment, this may be the time to pull the trigger.

"If you've got gains, you might want to take them now to lock in those gains or to lock in losses to offset those gains," said Kenneth Sibley, managing director at accounting firm Sibley & Co. PC in Dallas.

But given how stocks have performed this year, it's more likely that you have losses, in which case you need to decide whether to book the loss now or ride it out and hope the markets improve.

In any event, the halfway point in the year is the perfect time to make sure you're still on the right financial track.

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