With the summer in Brighton in full swing, you’re probably thinking about sunny days spent at the lake, family barbecues, camping with friends and all the other fun activities that only come around when the sun is out and the grass is green. But in summer, when life may be a little slower, your mind a little less cluttered, and the year is quickly approaching the halfway mark, it’s a good time to take the pulse of your savings and do a quick mid-year financial checkup.
A mid-year checkup can accomplish several things. You can stop and think about your financial goals; saving for retirement, a house, a child’s education, your next big trip or your rainy day fund, and then make sure that you are investing appropriately for those goals. Plus, while you’re looking at all your accounts, you can take care of “housekeeping” items like checking beneficiaries and addressing any life insurance or long-term care needs.
We’re accustomed to physical check-ups which help us stay healthy and taking our vehicles into the shop for their annual once-over. We should be doing the same sort of annual review of our finances.
Here are 6 things to do in a mid-year checkup.
1. Double check all your subscriptions.
Let’s start off your mid-year financial check-up with an easy assignment. Use your monthly credit card bills and bank statements to evaluate your subscriptions. This includes magazines, streaming services, newspapers, product boxes, food prep services and more.
Ask yourself if you still want to pay for all of those. It’s often easy to sign up for a free, week-long trial and forget to opt-out before you begin paying the costly monthly recurring fee. Or to be paying for a magazine subscription that only ends up in the recycle bin month after month.
Take the first step towards cleaning up your expenses by unsubscribing from anything that unnecessarily drains your spending money.
2. Negotiate your bills and shop around.
Brush up on your negotiating skills and give the cable company a call. Save yourself some money by reaching out to your internet, phone and cable providers to inquire about lowering your bill. You might be surprised what a company will do to keep your business. And if you can’t agree on a price you can always shop around switch providers entirely to get a lower rate just like you can with insurance.
When’s the last time you shopped around for better rates on your auto, homeowner’s or renter’s insurance. Unfortunately, just like our cable and internet bills, many of us forget that we’re not obligated to stick with the same company.
It’s not too difficult to switch insurance providers mid-year. But if you do decide to make a change, read the fine print of your policy and make sure there aren’t any cancellation fees.
3. See how your budget is holding up.
If you created a budget earlier this year, you’ve hopefully been reaping the benefits of having an easy way to track your spending and identify savings opportunities. But since expenses can evolve over time, it pays to take another look at your budget and see whether it’s realistic.
For example, if you budgeted a certain amount for food costs but are now paying much more at the grocery store because your child moved back in after college, you may want to reduce another spending category to allow for that increase.
The key is to make sure that your budget aligns with your expenses, and that you’re doing a good job of following it.
4. Review your overall financial goals.
Once you’ve shopped around for auto insurance, cut cable costs and cancelled any unnecessary subscriptions it’s the perfect time to look at the bigger picture and review your overall financial goals.
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 following through with them will put you in a better place financially.
Mid-year is the perfect time to check in on your financial goals, but it’s also the perfect time to set some if you haven’t already.
While you’re reviewing your finances, it’s a good idea to revisit the amount you’re saving. See if you’re already saving enough to reach your goals or if you could bump up your savings rate. Start by increasing your 401(k) by at least one percent and do the same to your general savings. (click here and sign up to receive our free 401(k) report)
5. Protect what’s yours.
Review the beneficiaries you’re listed on your accounts, no matter what your age is. When it comes to your retirement account assets, such as your 401(k), who you name as your beneficiary is very important because your beneficiary designations supersede any directions in your will.
It’s also wise to evaluate your life insurance insurance needs and to make sure you have the right amount and correct type of insurance to cover unforeseen circumstances that can derail your finances.
If your family is growing, you might want to increase the amount of your life insurance to protect your loved ones. Life insurance is mainly designed to replace lost income. As you get older, there are fewer years of income in the future, so the amount of income to replace decreases.
You might also benefit from looking into long-term care insurance, which may offer a variety of features and options.
Finally, also check your insurance beneficiary designations. It’s easy to do, but it could have a huge negative impact if it’s neglected. For example, if you forget to change the beneficiary after a big life event like a divorce, insurance proceeds could go to the wrong person if anything were to happen to you.
6. Review any important paperwork.
Thinking about a will, health care proxy, and power of attorney can be an uncomfortable topic, but consider the alternative. Do you want someone else making important financial and health decisions on your behalf without any input from you? If you don’t have any of these key documents, take the time to set them up.
If you do have them, review your paperwork and think about any life events you’ve been through. Marriage, divorce, birth, and death are the four big events that affect estate plans, but there are other factors that could affect your planning.
It’s worth it
While this might sound like a lot of ground to cover, a mid-year checkup is well worth the effort when you consider the hard work you have invested in building and protecting your savings.
You can still make a difference in your financial future this year! Call us today at (810) 522-5650 or click here to book an appointment with a member of our team and review your finances.
Written by: Katia Koerner
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