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Health & Fitness

Stay on Top of Your Finances with a Mid-Year Check Up

If you want to improve your finances, it’s important to be alert and engaged in your money habits throughout the year. In addition to monitoring your account balances and keeping up with your bills and savings plan, consider performing a more formal review of your finances half way through the year. Assuming you set financial goals in January, the mid-year review is an opportunity to make adjustments to your earning, spending and saving behavior to ensure alignment to your annual goals. If you tend to overspend or neglect your financial obligations, the simple act of dedicating time to your financial matters can also help strengthen your resolve. Here are five tasks to tick off on your mid-year checklist:

 1.    Review spending and income. Look back over your spending in the first half of the year to look for patterns that affect your bottom line. Has your income changed? Are you sticking to your budget? Did any large, unexpected expense come along to throw you off? If your expenses are higher than expected, make a plan to address the situation—either by increasing your earnings, saving more, or cutting back on spending. If, on the other hand, you suddenly have more disposable income than you anticipated, consider increasing the amount you save or accelerating your schedule for a planned purchase.

 2.    Check your insurance coverage and costs. Reflect on whether you have the appropriate levels of insurance coverage in light of recent life events such as getting married, buying a house, having a child or changing jobs. It’s also important to keep your beneficiaries up to date as the composition of your family changes. If your premiums are creeping up, it may be time to get quotes and switch to more affordable carriers.

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 3.    Track your tax obligations. Be mindful of any events that affect your annual tax bill. Have you recently sold investments or a home in excess of the capital gains exemption? If so, it’s wise to set money aside to meet the tax obligation on the capital gains of the sale. Likewise, keep track of any capital losses you have incurred that may reduce your tax burden. In a related area, make sure you’ve selected the appropriate number of exemptions so your paycheck deductions are sufficient to cover your end-of-year taxes without giving the IRS too much of your money to hold. And if you’re self-employed, continue to make your quarterly estimated payments, making sure the amount paid reflects your actual earnings so you don’t end up owing an unwieldy amount at tax time.

 4.    Adjust your savings. If more money has come your way through earnings, inheritance or other happenstance, now’s the time to bump up the amount you contribute to savings. And if a new goal has cropped up—anything from replacing your car, to financing a remodel or accelerating your retirement—factor it into your savings plan.

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 5.    Monitor retirement funds. If you have a retirement plan, check to see that your assets are distributed in accordance with your risk tolerance. Your financial advisor may recommend periodic rebalancing to optimize returns. If you’re over 70, make sure you are withdrawing required minimum distributions (RMDs) from your retirement plan or IRA in accordance with IRS guidelines to avoid penalties.

 Stepping back mid-year to check in on these five areas will help you be more disciplined and focused in your financial life. Your financial advisor can walk you through a mid-year review and provide valuable guidance to help you stay true to your monetary intentions all year long.

Victor C. Garra, is a Financial Advisor and Associate Vice President with Ameriprise Financial Services, Inc. in Greenwich, CT.  Victor specializes in fee-based financial planning and asset management strategies and has been in practice for 19 years.  Victor can be contacted at Ameriprise Financial 41 W. Putnam Ave Greenwich, CT 06830 1st Fl. Victor’s direct dial is (203)-302-6736.  You can also visit his website at:   http://www.ameripriseadvisors.com/victor.c.garra

 

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.

 

© 2013 Ameriprise Financial, Inc. All rights reserved

 

 

 

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