It’s hard to believe we’re almost halfway through 2025. Remember those financial New Year’s resolutions from January? Before the summer vacation mindset takes over, May offers the perfect moment to assess your financial health and make course corrections if needed.
Think of this mid-year review as your financial wellness check. Just as your doctor tracks vital signs like blood pressure and cholesterol, your financial health has key indicators that can reveal whether you’re thriving or need some remedial care.
Let’s examine the five most important numbers you should know before June arrives – and what to do if they’re not where you want them to be.
1. Your Current Savings Rate
The Vital Sign: What percentage of your income are you saving each month?
Healthy Range: Financial experts typically recommend saving 15-20% of your gross income, but any consistent savings rate is better than none.
How to Check: Add up all savings (retirement accounts, emergency fund contributions, other savings) from April and divide by your gross income for the month.
Savings Rate = (Total Monthly Savings ÷ Monthly Gross Income) × 100
Why It Matters Now: If your savings rate is below your target, you still have seven months to adjust and meet your annual goals. Many people find their spending increases during summer months, so knowing your savings rate before vacation season helps protect your financial progress.
Real-Life Example: Marcus discovered his savings rate had dropped to just 7% after reviewing his April finances. “I was shocked because I thought I was saving about 15%,” he admits. “After tracking my expenses, I realized several subscription services had quietly increased their fees, and my takeout spending had crept up significantly since January.”
The Prescription:
- If your rate is below 10%: Look for one major expense category to trim immediately (housing, transportation, food)
- If your rate is 10-15%: Consider implementing the “save your raise” strategy if you’ve received one in 2025
- If your rate is above 15%: You’re on track! Consider setting up automatic increases to your savings rate quarterly (even 0.5% increases add up)
2. Your Debt-to-Income Ratio
The Vital Sign: How much of your monthly income goes toward debt payments?
Healthy Range: Financial institutions consider a DTI below 36% healthy, with housing costs ideally below 28% of gross income.
How to Check: Add up all monthly debt payments (mortgage/rent, car loans, student loans, credit cards, personal loans) and divide by your monthly gross income.
DTI = (Total Monthly Debt Payments ÷ Monthly Gross Income) × 100
Why It Matters Now: Summer often brings additional expenses and temptations. Knowing your DTI before these arise helps you make better decisions about taking on any new debt.
Real-Life Example: Sophia calculated her DTI at 42% in May. “I hadn’t realized how much my auto loan was affecting my financial flexibility,” she says. “I made the decision to sell my newer car and purchase a reliable used vehicle instead, which reduced my monthly payment by $340. That’s nearly $4,100 a year I can put toward my other financial goals.”
The Prescription:
- If your DTI is above 40%: Consider this a financial red flag requiring immediate attention. Look for ways to increase income or reduce debt payments through refinancing or debt consolidation.
- If your DTI is 30-40%: You’re in the caution zone. Focus on not taking on additional debt while making more than minimum payments on existing debt.
- If your DTI is below 30%: You’re in great shape! Consider accelerating debt payoff with the debt avalanche or snowball method.
3. Your Current Credit Score
The Vital Sign: The three-digit number that lenders use to evaluate your creditworthiness.
Healthy Range:
- 800+: Excellent
- 740-799: Very Good
- 670-739: Good
- 580-669: Fair
- Below 580: Poor
How to Check: Many credit card companies offer free credit score access. You can also use services like Credit Karma or request your free annual credit reports from annualcreditreport.com.
Why It Matters Now: If you’re planning summer travel, home improvements, or other major purchases, knowing your credit score helps you predict what interest rates you’ll qualify for. And if you’re planning to apply for a new credit card for travel rewards, your score will impact approval.
Real-Life Example: Jordan checked his credit score in May and found it had dropped 43 points since January. “I realized I had accidentally missed a payment on a store credit card I rarely use,” he explains. “I immediately paid it, called the creditor to explain the oversight, and asked if they would consider removing the late payment from my report as a one-time courtesy given my history of on-time payments. They agreed, and my score recovered within 45 days.”
The Prescription:
- If your score is below 670: Check your credit report for errors, ensure all payments are current, and focus on reducing credit card balances.
- If your score is 670-740: Work on reducing credit utilization (aim to use less than 30% of available credit) and make all payments on time.
- If your score is above 740: Maintain your good habits and consider requesting credit limit increases (without using the additional credit) to further improve your utilization ratio.
4. Your Emergency Fund Status
The Vital Sign: How many months of essential expenses could you cover if your income stopped today?
Healthy Range: Most financial experts recommend 3-6 months of essential expenses in an easily accessible emergency fund.
How to Check: Add up your essential monthly expenses (housing, food, utilities, transportation, insurance, minimum debt payments), then divide your emergency savings by this number.
Months of Coverage = Emergency Fund Balance ÷ Monthly Essential Expenses
Why It Matters Now: Summer brings increased risk of certain emergencies – from air conditioning failures to storm damage to car troubles during road trips. Having your emergency fund ready before these peak risk months is crucial.
Real-Life Example: Taylor had saved $7,000 in their emergency fund by May 2025, which seemed substantial until they calculated it would only cover 2.3 months of essential expenses. “I realized I was more vulnerable than I thought,” Taylor says. “I immediately set up an automatic transfer of $300 per paycheck to my emergency fund and took on a weekend side gig for the summer to accelerate my savings. By September, I had reached my goal of 4 months’ expenses.”
The Prescription:
- If your fund covers less than 1 month: Red alert! Prioritize building this fund above all other financial goals except high-interest debt.
- If your fund covers 1-3 months: You have a good start but remain vulnerable. Look for expenses you can temporarily reduce to increase your saving rate.
- If your fund covers 3+ months: You’re on solid ground. Consider whether your personal circumstances warrant a larger fund (variable income, health concerns, etc.) or if you should focus on other financial goals.
5. Your Retirement Contribution Percentage
The Vital Sign: What percentage of your income are you directing toward retirement?
Healthy Range: Financial planners typically recommend 15% of gross income, including any employer match.
How to Check: Add up all contributions to retirement accounts (401(k), IRA, etc.) and divide by your gross income.
Retirement Contribution Rate = (Monthly Retirement Contributions ÷ Monthly Gross Income) × 100
Why It Matters Now: Mid-year is the perfect time to increase your contribution rate if you’re below target. Small increases now have significant time to compound before retirement.
Real-Life Example: Alexis had been contributing just 6% to her 401(k) – just enough to get her employer’s 3% match. After calculating this vital sign in May, she realized she needed to increase her savings rate. “I set up a 1% increase each quarter for the rest of the year,” she explains. “I barely noticed the change in my paycheck, but by December, I’ll be saving 10% plus the 3% match – much closer to the recommended 15%.”
The Prescription:
- If your rate is below 10% (including employer match): Increase your contribution by at least 1% immediately, then set up automatic increases quarterly.
- If your rate is 10-15%: You’re on the right track! Consider increasing your rate by 1% with each raise you receive.
- If your rate is above 15%: Excellent! Consider diversifying your retirement savings between traditional and Roth options for tax flexibility in retirement.
Creating Your Financial Treatment Plan
Now that you’ve checked your five financial vital signs, it’s time to create your treatment plan for the second half of 2025:
- Identify your weakest number – Which of these five metrics needs the most attention?
- Set one specific goal – Rather than trying to improve everything at once, focus on moving your weakest number into a healthier range by December 31st.
- Create an implementation plan – What specific actions will you take this week to begin improvement? What automatic systems can you set up to ensure consistent progress?
- Schedule your next check-up – Don’t wait until December to reassess. Set a calendar reminder to review these same five numbers in August, giving you time to adjust your approach if needed.
- Find an accountability partner – Share your goal with someone who can help keep you on track, whether it’s a financially savvy friend, a spouse, or a financial advisor.
Remember, the purpose of this mid-year check-up isn’t to make you feel bad about your current situation – it’s to empower you with information so you can make intentional decisions for the remainder of the year. Just like physical health, financial wellness responds to consistent, positive habits over time.
What’s one financial vital sign you’ll improve before June arrives?