The summer is over and many of us are getting back to business after a well-deserved break. Kids are going back to school and the holiday season will be here before we know it.
Before you get wrapped up with Halloween, Dia de Los Muertos, Thanksgiving, Hanukkah, Pancha Ganapi, Christmas, and New Year; take time to get financially fit for Fall so you can close the year strong.
Revise & Update Your Budget
If you made your budget earlier this year, now is a great time to review, revise, and adjust.
- Did any of your bills go up or down?
- Did you add new expenses or eliminate some?
- Have your savings goals changed?
- Did your income increase?
Lots of things can change in a short time and taking a few minutes to dust off your budget and make updates will help you stay on top of things.
If you don’t already have a budget, now is a great time to draft one.
Check Your Emergency Fund
Your emergency fund, a bucket of cash that lives at the bank, is there to be used. Maybe you used some of it for a sudden expense. Does it need to be replenished?
As of the writing of this article, interest rates are still elevated, and cash deposits can receive interest as much as 4% a year. Is your emergency fund earning interest? If not, can you move to an account type or institution that will pay you interest?[1]
Is there too much money in your emergency fund? If so, some of that cash could be invested to further your financial goals.
Check Your Debt Levels
It’s wise to check your debt levels ahead of the holiday season. Did you put your summer vacation on the credit card? Do you need to pay down some balances before it’s time for holiday shopping and travel?
Maybe you paid off some debts during the year and you want to have a little private celebration to recognize your work.
No matter the case, checking in to see what your debts look like is a wise idea.
Check Progress Toward Financial Goals
Now is the time to consider if you’ve made enough progress toward your financial goals.
- Did you make your IRA and/or 401(k) contribution?
- Did you fund your 529 plan for the year?
- Did you stay committed to your monthly saving goal?
- Did you achieve a milestone like making a major purchase?
You may have some recognition to give yourself, but you may also have some course correcting to do before the year ends.
Plan for Yearend
Yearend is a busy time for all of us. We are engaged with celebrations, seeing family and friends, and preparing for the close of one year and the open of another.
Some of your yearend To Dos might be:
- Budgeting for holiday expense like gifts, travel, and hosting celebrations.
- Talking to your tax advisor about things you need to accomplish before yearend to mitigate a potential tax liability.
- Talking to your financial advisor about tasks you need to complete to meet your financial goals or charitable giving goals.
- Making sure you’ve taken any Required Minimum Distributions before December 31st.
- Setting aside time to review your Financial Plan and budget for the New Year in January or February.
This may all seem like a lot of work, but most of it can be handled in just a couple of hours.
While it may not be a sexy as getting physically fit, being financially fit can boost your mental health, family harmony, and empower you to enjoy your money, rather than worry about it.
Do you need guidance on getting financially fit?
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[1] Your emergency fund should always be in cash at an FDIC insured institution. Do not invest your emergency fund in risky assets.
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