As we hit the midpoint of 2025, it’s obvious that we face a more complex financial landscape than in recent years. As the Canadian economy meets challenges with on-again, off-again US tariffs, creeping inflation, and the Bank of Canada holding its rates steady, it’s more important than ever to take stock of your financial health. A mid-year financial review can help you adapt to changing conditions, protect your investments, and stay on track toward your goals.
Reassess Your Budget and Investment Strategy
Start by reviewing your household budget. We’ve all noticed prices creeping up, possibly due to higher prices on U.S. imports. There’s never been a better time to support your local and Canadian economy by buying Canadian products that may be less affected by tariffs.
If you’re feeling the pinch at the grocery store or gas pump, it may be time to adjust your discretionary spending. Since it’s summer, we are fortunate to have an abundance of local produce and other groceries at our disposal. Check out the #Loyal2LocalChallenge and join in by shopping at your local farmers’ markets and small businesses.
On the investment side, volatility in the markets, especially in sectors like manufacturing, energy, and commodities, means it’s crucial to revisit your portfolio. Are you overexposed to industries directly impacted by the trade dispute? Diversifying across sectors and geographies can help reduce risk so it’s a good time to check in with your financial advisor to see what options are available.
Adjust Your Financial Goals
Given the economic uncertainty, it’s wise to revisit your financial goals. If you were planning a major purchase, consider whether it still makes sense or if delaying it may be the prudent choice.
- Short-term goals: Rising costs may require you to increase your emergency fund or delay non-essential spending.
- Long-term goals: If your retirement or education savings have taken a hit, consider increasing your monthly contributions or adjusting your timeline. Remember that time is generally your friend with investing. Have a student in your home who needs a little help? There’s still time to apply for our CU Connects Bursary program, the deadline is July 25.
Use this opportunity to set realistic, updated goals for the remainder of the year. Haven’t bothered to make a budget before? It’s probably a good time to do that, so you can stay focused and flexible with your money.
Review and Improve Your Credit Score
With interest rates holding steady, maintaining a strong credit score is more important than ever. A good score can often help you secure better rates on mortgages, car loans, and lines of credit.
Check your credit report through Equifax or TransUnion Canada. Look for errors, signs of identity theft, or outdated information. To improve your score:
- Pay bills on time.
- Keep credit utilization low (ideally under 30%).
- Avoid opening multiple new accounts in a short period.
If you’re carrying high-interest debt, consider consolidating or refinancing.
Evaluate Your Savings and Rebalance Your Portfolio
How are your savings tracking against your goals? If you’ve had to dip into your emergency fund due to rising costs, make a plan to replenish it. Aim for at least three to six months’ worth of expenses in your emergency fund, but don’t panic if you can’t swing that right away, just start saving. Some savings is better than none.
For investors, mid-year is a smart time to rebalance your portfolio. The Canadian market has seen shifts due to the trade conflict, particularly in sectors like metals, manufacturing, and energy. The federal government has introduced new trade rules, including tighter origin requirements and reciprocal tariffs. These changes could impact companies’ profitability and stock performance.
Rebalancing ensures your asset alloc ation remains aligned with your risk tolerance and long-term objectives. We’re here to help you navigate these changes.
Consider Tax-Efficient Investing Strategies
With the second half of the year ahead, now is a good time to implement tax-efficient strategies to reduce your 2025 tax burden.
Be sure to maximize RRSP and TFSA contributions since these accounts offer tax-deferred or tax-free growth, making them ideal for long-term investing.
Given the economic uncertainty, it’s worth reviewing your tax planning with a professional, especially if you own a business or have cross-border investments.
Stay Informed, Stay Flexible, and Don’t Panic
The Canada‑U.S. trade dispute is a reminder that global events can have very local consequences. Ottawa’s response which includes retaliatory tariffs, procurement restrictions, and a $10 billion support program for affected industries, may help cushion the blow, but we know that Canadian consumers and investors have already felt the impact.
A mid-year financial review gives you the chance to adapt. By tightening your budget, adjusting your goals, monitoring your credit, and rebalancing your investments, you can build resilience and confidence for the months ahead.
Financial planning isn’t about predicting the future, it’s about preparing for it. And with our expertise, we’re here to help you do just that.