Now that the year is a little bit more than half over, it’s time to take a look at a few ways to improve your finances. The fact is, during summer many people tend to let their finances go a little bit and, unless you want them to become completely disorganized, now’s a good time to use a little bit of discipline that could actually improve your financial situation by the time fall sets in and the leaves start turning. Enjoy.
First, since July 1 is the day that half the year is officially over, it’s a good time to review your spending from the last six months and make any adjustments that you might need. Ask yourself a few questions as well such as;
- Have you been spending money on things that truly matter to you or on things that you really don’t need?
- Has your spending been intentional or laissez-faire and possibly even irrational?
- Have you made purchases or did you have expenses that you didn’t expect?
- Are there problems with your budget or are you going over budget regularly?
It’s at this point that it’s a good idea to identify your financial as well as your personal goals and make sure that your spending is in alignment with these goals. For example, if you have a golf membership that you never use, a boat that you never take out fishing or other things that are expenses that you don’t need, maybe it’s time to sell or cancel them. Doing this will not only save you money but also free some up to pay down other debts, put into your 401(k) or otherwise put to good use.
Now is also an excellent time to start planning for your holiday spending. When you consider that holiday retail sales in 2012 were just under $580 billion, you realize just how much we spend during the holidays. Now would be a good time to start setting aside money that’s specifically for holiday purchases like travel and gifts so that, come December, you don’t find yourself overspending and, come January, you don’t find yourself in bill payment purgatory.
Another reason to start planning now is to avoid overspending on last-minute gift purchases or travel arrangements. Also, if you’re that kind of person that likes to make your own gifts for the holidays, starting now will give you plenty of time to finish before December rolls around.
As interest rates are low right now, you may wish to consider refinancing your home mortgage. Most financial experts believe that waiting for rates to go lower is a mistake and, considering that rates right now are the lowest they’ve been in quite some time, they’re probably right. If you’ve applied for a refinance loan but have been denied due to low equity in your home it may be a good idea to try again, especially if it’s been sometime since you did and your home has gained some equity. You may also wish to consider refinancing on other big-ticket items that you might have including RVs and boats.
If you haven’t already done it, now is a good time to automate your savings and also your bills. Simply put, automating your bill payment is one of the best ways to make sure that you never pay a bill late and never get nailed with those late fees and, since most banks offer this option, there’s no reason not to. The same thing can be said for your savings and may well be one of the most important financial changes that you can make as people who automate their savings generally have 30 to 40% more in savings than those who don’t.
The same thing can be said for your retirement contributions. The fact is, the more that you put aside in your retirement accounts, the more that compound interest will help you to increase those amounts and increase your retirement nest egg. In most cases it’s not about how much money you actually put into your accounts (although the more, the better) but rather how long that money is in the account. The sooner you start the more compound interest will play a role in increasing the amount of money you have when you’re retirement date finally arrives.
This is especially true if your employer has a 401(k) or 403(b) matching program and you’re not taking advantage of it yet. Simply put, if you’re not putting in enough to meet their full match your leaving money on the table, money that, combined with compound interest, could very well and a huge amount to your retirement fund. Also, keep in mind that while some employers will let you adjust your retirement holdings at any time that you wish, others will only give you the option to do it twice a year. If that’s true for your company, now would definitely be the time to increase the amount that you’re putting in.
If you have any questions about financial topics of any kind, please let us know and will get back to you with advice, answers and options.