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Time for a Mid-Year Financial Check-up

You Can Still Make a Difference in Your Financial Future This Year

Believe it or not, the year is half over. That means it’s time for a mid-year financial checkup. We’re accustomed to physical check-ups which help us stay healthy. We even take our vehicles into the shop for the once-over to improve their performance. It only stands to reason that we should do the same for our finances. The National Foundation for Credit Counseling suggests that consumers review the following areas and take action where necessary:

  • When was the last time you looked at your New Year’s Resolutions list? Are you meeting the financial objectives you set for yourself six months ago? If not, remind yourself of why you set those goals, and why implementing them will put you in a better financial situation.
  • Is your savings account growing? Perhaps it doesn’t exist at all. The absence of a savings account, or a poorly funded one, puts you and your family on a very slippery financial slope. The people who have the hardest time saving are often the ones who most need a safety net in case of an unplanned expense or emergency.
  • Are you maximizing the potential interest on your savings? Many banks and credit unions now offer interest on accounts that is remarkably high compared to standard rates for such accounts. Shop sites such as www.checkingfinder.com or www.bankrate.com to research the rates and terms. You usually have to meet some minimum requirements such as a certain number of debits during the month, a direct deposit or draft from your account, and agree to receive your statements online rather than by mail, but the interest rate often makes jumping through these hoops very doable. Always make sure that the financial institution where you deposit your money is FDIC or NCUA insured.
  • Are you tracking your spending? People work hard for their money, but spend it with abandon. Even if you feel as though you have control of your spending, you won’t know for sure until you track it for at least 30 days. Write down every cent you spend, and then put your spending into categories. At this point you can make conscious decisions regarding how you want to spend moving forward.
  • Have you ordered a copy of your credit report? Your credit report is basically your credit reputation. It is a reflection of who you’ve borrowed from in the past, and how you repaid them, and is the basis of your all-important credit score. Since you can obtain your credit report free of charge from www.annualcreditreport.com, what are you waiting for?
  • Are you financially organized? This will keep you from overlooking bills and paying late, which results in late fees being added to your balance, negative marks on your credit report, and a lowered credit score.
  • Have you updated your W-4? You don’t want to underpay or overpay Uncle Sam, yet last year millions of people overpaid by thousands of dollars. To determine the proper number of withholding allowances, go to www.irs.gov and type the words “withholding allowance” in the search box. It will provide you with a simple worksheet. Answer a few questions and you’ll have the correct number of allowances to withhold. You are allowed to adjust your W-4 at any time during the year, and should do so whenever your situation changes for events such as a marriage, divorce, death, birth, etc.
  • Are you prepared for holiday expenses? Remember the old Holiday Accounts where everyone methodically deposited money throughout the year and then drew it out during December to pay cash for their purchases? That idea is one that we should take out of the moth balls, dust off and put into practice. Now is the time to establish your own personal Holiday Account. Involve the entire family in finding an extra $20 per week and start making out your gift list, as you’ll have $500 to spend. And the best gift of all will be the one that you give to yourself…a debt-free holiday.

The good news is that it’s not too late to still make a difference in your financial health this year. For instance, if you managed to save $1.00 per day for the rest of the year you’d have over $180 socked away. That’s not much, but it may be more than you have now, and even more importantly, it will get you into the habit of saving.