No one ever thinks about their finances in the summer. Everyone is in vacation mode and thinking about all the fun that can be had outside, but now that fall is almost here, spending a little bit of time right now on your finances can have a big impact.
We won’t take too much of your time. This isn’t a post about rebalancing your 401(k) or reorganizing your financial documents, these are a series of short tasks you can do right now to set yourself up for a great rest of 2014.
Review the Year So Far
The first thing to do is review the year up to this point.
How have you done this year?
Take an honest look at the way you’ve managed your money this year, and acknowledge your missteps.
You should also recognize the good you’ve done. Identify the areas where you need improvement, and then build on the areas where you have had success.
A little introspection can go a long way as you work to improve your finances for the rest of the year.
For example, have you been contributing to your retirement? Did you get a raise? Take a few minutes to review your contributions and see if there’s room for you to increase those contributions.
There are plenty of opportunities to right the wrongs, especially if you start now!
Look Ahead to Potential Costs
The key to financial responsibility is anticipation and preparation.
Try to figure out what costs you are likely to incur for the rest of the year and come up with a plan.
If you anticipate some major expenditures, start setting money aside for them right now. If the expense has to be paid, you’ll be ready. If not, then you’ve just boosted your emergency fund.
If you’re struggling to find ways to save for a future expense, cut unimportant expenses from your budget now even if it is a little uncomfortable.
Cutting your cable bill might not be fun but neither is paying high interest rates.
Planning ahead is one of the best ways to ensure that you have enough money to meet your obligations without breaking the bank.
Think About Your Taxes
Most people don’t think about their taxes until December, when all the newspapers and magazines publish those “last minute tax moves” articles.
Now is actually the best time to start planning your potential tax moves, when you have the flexibility of months to execute them.
Find out if some of your plans would allow you to take a tax deduction, or qualify for a tax credit.
Can you boost your retirement plan and/or HSA contributions for a tax deduction? Maybe you can harvest some tax losses from investments?
In fact, harvesting investment losses is a great move to make for the second half of the year, especially if you sold some investments earlier in the year at a capital gain.
You want to be able to offset some of that capital gain with losses, if you have some assets that no longer make sense in your portfolio.
If you are ambitious, figure out what you are likely to owe, and make sure you have a file for collecting documentation.
Look for Opportunities to Earn More
Finally, be on the watch for opportunities to earn more.
You can start a side gig, sell some of the stuff you don’t use anymore, or even just see if you can work overtime.
You can also consider asking for a raise or a promotion if you can show that you have made contributions to your company.
The rest of the year provides opportunities for another start and you should take advantage of them.