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8 Step Summer Financial Checkup  | Guide From Our Financial Advisors Thumbnail

8 Step Summer Financial Checkup | Guide From Our Financial Advisors

We all look forward to the slower days of summertime in Texas, especially as the weather gets warmer, the days get longer, and time with family is simpler. These slower months can be a great time to check in on your family’s finances. Many families put their finances on the backburner until something happens in their life to cause them to reevaluate. We encourage you to always conduct a mid-year review, so you are prepared for all that life throws at you, especially during busier seasons. Conducing an analysis of your family’s financial strategy doesn’t have to be intimidating, we’ve broken it down into eight simple steps to keep you focused and on track.

Step 1: Review Your Family’s Budget

One way to make sure you aren’t spending more than you’re earning is review your family’s monthly and annual budget. If you’ve never taken the time to develop a budget, this time of year can be a great time to do so. If you need help getting started on your family’s budget, we have several resources that can help you get started.

Most of the time, your credit card company or bank already offers categorical breakdowns of your spending, which can be a great way to find out where you’re spending your money where you could afford to make some adjustments. We encourage you to look back over the past six to 12 months to get an accurate evaluation of your saving and spending habits.

Step 2: Look for Tax-Saving Strategies

If you’re like most people, you wait until March or April to pull together all the documents you need for tax season. Perhaps this year you can start earlier and work with your financial planner or tax professional outside of the busy season to create a mock tax return. This can help you understand your withholding options and tax-saving opportunities such as 401(k) or 403(b) options, IRAs and HSA contributions. Connecting with your tax professional now will give you more time to work together on saving strategies for next year’s returns.

We always encourage our clients to introduce us to their tax professionals so we can work hand-in-hand with them to make sure your financial strategy and your tax strategy are in alignment.

Step 3: Reduce your Debt

An alarming 62 percent of adults have carried over credit card debt in the last 12 months.1 If you fall into this category, we always encourage you to prioritize taking care of your debt. But keep in mind that not all debt is “bad debt.” Common debt such as mortgages, car payments, etc., are normal for most families and individuals. However, focus on taking care of bad debt such as credit card debt, student, loans, etc. and put together a plan to minimize and eventually eliminate this debt. Start with the debt that carries the highest interest rates. You can work with one of our financial advisors to create an annual debt summary that will give you a better picture of what your debt looks like. Then, together, you can build a plan to address it. 

Step 4: Review your Short and Long-Term Goals

A lot can change in a year - marriage, death, divorce, growing your family and experiencing a major career change. Even seemingly small adjustments, like a job promotion or sending a kid off to college, can have a significant impact on your financial strategy. That’s why at each financial review, it’s important to review both your long-term goals and your short-term goals to see how you’re progressing towards them and if any adjustments need to be made to your financial plan to help you obtain them. 

Step 5: Evaluate Recurring Expenses

As managing most expenses has gotten “simpler” with the addition of paperless billing and automatic payments, it has also gotten easier to lose track of what you’re really paying for a long of subscriptions and recurring expenses. During your mid-year financial checkup, we encourage you to look at your internet, cable, wireless service and insurance coverage. Make sure you still have a need for all that you’re paying for and that you are not paying more than you need to be.  

Step 6: Review Your Investment Portfolio

It’s important to review your investment portfolio with your financial advisor on a regular basis to ensure it still aligns with your overall financial strategy and risk tolerance. While most managed portfolios will be rebalanced automatically, it’s important to take stock of your investments’ big picture. Doing so can help you determine if you need to diversify differently or reassess your risk tolerance.

Step 7: Review Your Retirement Plan

Whether retirement is decades down the line or within the upcoming year, it’s important to review your retirement plan and how you’re saving towards it on a regular basis. Are you making the most of your retirement contribution options? Are there options available to you that you’re not taking advantage of? Does your current strategy align with your timeline to retirement and the type of life you want to lead in retirement? These are all important questions to review with your financial advisor at least once a year.

Step 8: Review Your Estate Plan

It’s not the most fun topic during the summer, but estate planning is an important component to any complete financial strategy. You must review it regularly so you don’t risk leaving your loved ones with an outdated will, trust or estate plan. Make sure you’re accounting for any newly acquired assets (houses, cars, pets, etc.) while updating your beneficiaries.

Take time to relax and spend quality time with the family this summer but do yourself a favor at perform your financial checkup while you have the opportunity. You’ll be happy you did so when the cooler weather comes around along with all the activities that come with it. Set up a review with a financial advisor today. If you don’t already work with an advisor, visit our Contact Us page to schedule a meeting or learn more about our Associates from our team page.

  1. https://www.nfcc.org/resources/client-impact-and-research/2020-consumer-financial-literacy-survey/

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
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