As summer arrives, many federal employees have already settled into a routine. Paychecks come in, bills get paid, TSP contributions happen automatically, and financial decisions often move to the background. But mid-year is actually one of the best times to pause and take a closer look at your finances.
Research from the American Psychological Association consistently finds that money is a significant source of stress for many adults, affecting everything from sleep quality to physical health and workplace performance. By checking in on how your money is working for you mid-year, you can set yourself up to feel more secure in your finances through the second half of the year!
Review Your TSP Contributions
For many federal employees, the Thrift Savings Plan (TSP) is one of the most powerful tools for building long-term financial security. Mid-year is a good time to ask yourself a few questions:
- Am I contributing enough to receive the full agency match?
- Have my financial circumstances changed since January?
- Do I need to adjust contributions to stay on track with my retirement goals?
According to Kiplinger, employees covered under the Federal Employees’ Retirement System (FERS) who contribute at least 5% of basic pay receive the full government matching contribution, making this one of the most valuable benefits available to federal workers. If you received a step increase, promotion, or pay adjustment earlier this year, consider directing part of that increase toward retirement savings before your budget adjusts to spending it elsewhere. For employees trying to maximize retirement savings, the IRS increased the elective deferral limit for 2026 to $24,500, with additional catch-up contribution opportunities available for eligible participants age 50 and older.
Even if increasing contributions is not realistic right now, simply confirming that your contribution rate still aligns with your goals can provide peace of mind.
Check Your Tax Withholding
Many employees only think about tax withholding during tax season. Unfortunately, that can mean discovering a surprise refund or tax bill after the year is already over.
Major life events can affect your withholding throughout the year, including:
- Marriage or divorce
- Birth or adoption of a child
- Changes in household income
- Home purchases
- Significant changes in deductions or credits
The IRS recommends reviewing withholding periodically and offers a free Tax Withholding Estimator to help employees determine whether adjustments may be needed. A large refund can feel like a bonus, but it also means you haven’t been making the most of your federal paycheck when you get paid. Conversely, insufficient withholding could result in an unexpected tax bill next spring.
Mid-year provides plenty of time to make corrections before year-end.
Consider the Impact of Inflation
Even as inflation rates have moderated from recent highs, many households continue to feel pressure from higher prices for groceries, housing, utilities, insurance, and everyday expenses. Pay increases don’t always translate into greater purchasing power, and if you’ve noticed your paycheck stretching less than it did a year ago, you’re not imagining it.
A useful exercise is to compare your current spending with what you were spending six to twelve months ago. Consider reviewing:
- Recurring subscriptions
- Insurance premiums
- Grocery spending
- Dining and entertainment expenses
- Utility costs
- Debt payments
You may find opportunities to reduce expenses without making major lifestyle changes. Sometimes small adjustments can create enough room in your budget to increase savings, pay down debt, or build an emergency fund.
Additionally, The Consumer Financial Protection Bureau notes that maintaining a budget and emergency savings can help households better absorb unexpected financial shocks and reduce financial stress.
Not sure where to begin with budgeting? Check out our past #FedLifeHacks article on building a Bare Bones Budget!
Revisit Your Emergency Fund
An emergency fund is not the most exciting financial goal, but it is often one of the most important! Unexpected expenses rarely arrive at convenient times. Vehicle repairs, medical bills, family emergencies, and household repairs can quickly create stress when cash reserves are limited.
If you already have emergency savings, consider whether the amount still reflects your current expenses. If you do not have one yet, even setting aside a small amount each pay period can help build momentum. If you’re able, financial experts generally recommend maintaining several months of essential expenses in readily accessible savings, though individual needs vary.
Having a financial cushion can often reduce stress even when it is never used. And if you need a guide to build that cushion, be sure to check out our past #FedLifeHacks article on Building an Emergency Fund!
Review Your FEGLI and Beneficiary Designations
Many federal employees enroll in Federal Employees’ Group Life Insurance (FEGLI) and complete beneficiary forms early in their careers, then rarely think about them again. Mid-year is an ideal time to confirm that your beneficiary designations still reflect your wishes, especially if you’ve experienced major life changes such as marriage, divorce, or the birth of a child. The Office of Personnel Management (OPM) encourages employees to periodically review both their FEGLI coverage and beneficiary elections to ensure they remain current.
Financial wellbeing isn’t only about building savings and preparing for retirement. It’s also about making sure the people who depend on you are protected if something unexpected happens!
Take Advantage of Flexible Spending Accounts
If you’re enrolled in a Flexible Spending Account (FSA), now is a good time to check your balance and estimate how much you expect to spend before the end of the year. Many federal employees underestimate the amount available in their healthcare or dependent care FSAs. Reviewing your account now may help you identify opportunities to use funds for eligible medical, dental, vision, or dependent care expenses before applicable deadlines arrive. You can review your FSA account at: https://www.fsafeds.gov/.
If you’ve been putting off a dental procedure, eye exam, or other eligible expense, a mid-year review can help you determine whether it makes sense to schedule those services before year-end.
A quick check today can help prevent a last-minute rush later.
Evaluate Your Debt Paydown Progress
Have your balances gone down? Have interest rates increased? Could accelerating payments on high-interest debt improve your financial situation? If reducing debt was one of your goals at the beginning of the year, now is the perfect opportunity to assess your progress. The Consumer Financial Protection Bureau notes that reducing debt and improving cash flow can increase financial resilience and help households better weather unexpected expenses.
Remember: the purpose of a mid-year review is not to judge yourself. It’s simply to understand where you stand and decide whether any adjustments would help you reach your goals. Even small wins deserve recognition!
Plan Ahead for Open Season
Open Season may still feel far away, but mid-year is one of the best times to begin evaluating your federal benefits options. Have your healthcare needs changed? Are you expecting major medical expenses next year? Has your family situation changed?
OPM recommends that employees compare health plan options annually because premiums, provider networks, and benefits can change from year to year. Starting your review now gives you time to research options carefully rather than making decisions under a deadline during Open Season.
Check Your Leave and Financial Goals Together
Financial wellness and leave planning often go hand in hand. If you have significant annual leave accumulated, consider how you might use that time intentionally. Whether it’s taking a vacation, spending time with family, tackling personal projects, or simply resting, time away from work can support both physical and mental wellbeing. At the same time, think about upcoming expenses tied to future leave plans. Holiday travel, family gatherings, and year-end celebrations often bring additional costs.
Planning and saving gradually throughout the second half of the year can help reduce financial stress and prevent reliance on high-interest credit cards when those expenses arrive.
Make Sure Your Money Has a Job
Many people know where their money goes each month, but fewer people intentionally decide where it should go before it arrives. That’s where budgeting can help! At its best, it is simply a plan that aligns your spending with your priorities.
If you want help getting organized, several tools are available:
Whether your goal is paying off debt, building savings, preparing for retirement, or simply feeling more in control, having a system can reduce the mental burden of wondering where your money is going.
Don’t Forget About Your Employee Assistance Program
When people think about Employee Assistance Programs (EAPs), they often focus on mental health counseling and wellness resources. However, many EAP programs also offer financial counseling, budgeting assistance, debt management guidance, and referrals to financial professionals at no cost to employees.
If financial concerns are affecting your sleep, relationships, or overall quality of life, your agency’s EAP may be a valuable resource. OPM notes that EAP programs are designed to help employees address personal issues that may affect job performance, health, and overall wellbeing.
A Mid-Year Reset – Not a Mid-Year Report Card
A mid-year financial review isn’t a test, and it certainly isn’t a report card. Life happens. Unexpected expenses arise. Priorities shift.
Whether you increase your TSP contribution by one percent, adjust your withholding, review your FEGLI coverage, start building an emergency fund, or create a budget for the first time, small actions taken today can make the second half of the year feel more manageable. And when financial stress decreases, mental wellbeing often improves right alongside it!
Your paycheck is one of the most important benefits you receive. Taking a little time now to make sure it is working for you can pay dividends well beyond your bank account!
This article is intended for educational purposes and does not constitute financial advice.
SUBSCRIBE TO OUR NEWSLETTER
MORE FROM FEEA
