5 Smart Money Moves To Make Before Summer
4 SUMMER FUN IN THE SUN
When thoughts of vacation and beach come floating across your mind, chances are thinking about your financial life is at the bottom of your priority list. And why would it be anywhere else?
Here’s an idea: Before you put the daunting financial concerns and issues on the summer shelf, why not head into summer on a strong note by crossing a few things off of your list of money to-do’s? Then you can relax, put your feet in the sand, and soak in the sun stress-free.
Following are 5 quick and effective actions you can take before summer.
Tax Check In: If you received a refund of more than $1,000, and your situation hasn’t changed materially, consider adjusting your withholding to put more money in your pocket with each pay period. If you wound up paying the government, you might need to adjust your withholding to pay in and avoid potential penalties. Check in with your non-retirement investments to get an idea of any sizable capital gains or losses.
Investment Buckets: It’s wonderful and smart to accumulate wealth for future goals. First: Consider the time expectancy of your goals and make sure your investments are properly aligned with the time horizon. In other words, if your goals are less than 8-10 years away and you are invested in all stocks, you might be taking an unwarranted and inappropriate risk. The shorter amount of time you have until your goal arrives, the less risk you can afford to take. This doesn’t mean that if you are planning on retiring in a few years that you should be in cash or short-term bonds; retirement requires a payout of cash flow over the length of your retirement. If you retire at 65, you might need your funds to last another 30 years. And there’s nothing short-term in that!
Insurance Protection: Look at all of your insurance policies and add up the deductibles and co-insurance necessary before full benefits kick in—this is the amount you need readily available in your emergency fund. You should have the amount of your insurance deductible (no matter how high) reserved for possible or expected needs. While no one likes a pile of cash (non-productive assets) sitting around earning next to nothing; it is the right thing to do; not doing so puts your financial stability in danger. Check those policies and stash the cash.
Retirement Preparation: If you haven’t maxed out your 401(k), consider kicking it up a notch or two. Remember, time is your best friend or worst enemy. Don’t let market swings alter your investments philosophy. If you have maxed out your contributions, divert the same amount each pay period to a non-retirement investment account. Set it up to auto pay and keep saving and accumulating. To provide more retirement flexibility, you want parity between your tax-deferred accounts and your non-tax deferred accounts. Since we can’t predict what the tax laws will be when you begin to draw money out of your retirement plans, having built-in options is important.
Review Your Spending: The word “budget” can create all kinds of negative feelings, but let’s face it, if you don’t know where your money goes, how can you target savings/investments? It’s simple: You can’t. Use technology to easily check where you spend your money each month; especially in the discretionary areas (entertainment, vacations, eating out, etc). You know the cost of your rent or mortgage, your car payments, insurance costs; they’re all fixed. It’s the cost of living beyond those fixed expenses that many have trouble tracking. Yes, this can be time consuming, but frankly, once you get your program set up, it’s not too bad. Check out Quicken, Mint, NCH,YNAB to name a few. Whatever system you choose, make it easy, repeatable and most importantly useful information.
By knocking off these 5 important money issues, you are setting yourself up for peace of mind that you’ve moved your financial life forward. Now, don’t forget the sunscreen!
And also relax and go shopping…..
“HIT LINKS” BELOW AND GO SUMMER “WILD” SHOPN BEFORE THE SUMMER IS GONE
DAVID BECKHAM *KENT&CURWEN ENGLAND