It feels like you just packed away the holiday decorations yesterday, but believe it or not, 2021 is already half over. As we sail into the season of barbecues and beaches, take a few minutes to give yourself a mid-year financial checkup. A small investment of time can spur important changes that can affect your financial wellness for the rest of 2021 or even for years to come.
Use the seven steps detailed below to guide you through your checkup.
Step 1: Revisit Your Budget
Remember sitting down in December and crunching all those numbers? There’s no need for such a detailed job again, but take some time to review your monthly budget. Are you sticking to the planned budget for every category? Are you overspending in some categories or under-spending in others? Do you need to adjust your allotted budget in some areas or maybe trim your discretionary spending across the board?
Review your spending over the last few months and make any necessary changes so your budget can continue working for you.
Step 2: Anticipate Large Expenses
Now that you’ve updated your monthly budget, take a moment to list any large expenses you anticipate having in the next six months. This can include household appliances that may need replacing, expensive car repairs that will likely become necessary or an anticipated medical expense that is not fully covered by insurance.
Once you have this information in hand, determine which spending category you will take the money from to cover these expenses. Make the decision about sourcing this money now so you don’t make the wrong choices when you’re stressed and pressed for time in the future.
Step 3: Review Your Tax Withholdings
Review your tax withholdings to see if they need any adjusting. If taxes and numbers are not your thing, ask your accountant for assistance with this step. Your goal here is to pay the perfect amount so you’re not hit with a huge tax bill at the end of the year but also not lending the government your money interest-free.
Step 4: Check Your Credit Report
Your credit score is like your money grade, indicating the degree of your financial wellness and responsibility. Visit AnnualCreditReport.com for your free credit report from any of the three major credit bureaus: Experian, TransUnion and Equifax.
Review your report in detail. Are there any errors you’ll need to contest with the Federal Trade Commission? Take the necessary steps to fix your score today, whether that means contesting a charge, setting up an automatic payment on some of your bills or lowering your credit utilization rate by paying with plastic less often.
Step 5: Review Your Investments
Now is the time to review and adjust all of your investments. This includes your contributions to your retirement funds, any stock investments, bonds, trust funds or savings certificates. Make sure you are maximizing your contributions when possible and that your other investments are performing according to plan.
Step 6: Tackle Your Debt
List every single outstanding debt, including credit card debt and loans. Designate one debt to tackle first, then work on a plan to get rid of your chosen debt, being careful not to neglect the others. See if you can trim your budget or boost your income in any way to increase your payments on this debt. Once you’ve paid it off, move to the next one on your list so you’re on your way to a debt-free life.
Step 7: Review Your Financial Resolutions and Long-term Goals
Which financial resolutions did you jot down at the end of 2020? Take some time to review these goals and to determine whether you are indeed taking the steps necessary for making them happen. If you’ve been neglecting them for the first half of 2021, create a plan for working toward them for the rest of the year. Remember: With determination and proper planning, nearly any financial goal is possible!
Now that you’ve given yourself a thorough financial checkup, you can kick back and enjoy the sweetness and the sunshine of the season, guilt-free. Happy summer!
Noble Credit Union, celebrating 80 years of service, treats each member with kindness, dignity, and honor while helping members make sound financial decisions. The Credit Union offers members full access to a wide range of financial education and services, including low rate auto loans, MyRewards Visa credit card, mortgage and equity loans, online and mobile banking, and more. For more information about membership at Noble Credit Union, call (559) 252-5000 or visit NobleCU.com.