Your June, Mid-Year Money Review
It’s here – we’re almost half-way done with the year and so it’s time to review or set new money goals.
WEEK 1 – Dig out the budget
You need to do this at the beginning of each month but if it’s been a few, start by collecting the incomes and outgoes of the last month (or two) and compare it to your plan (budget).
There are two objectives here:
- Analyze where you’ve been spending more or less than planned.
- Revamp the budget to your current reality.
It’s not just about beating yourself up for spending too much on shoes or eating out (though you may need to recommit to saving more, spending less). It’s also about having a realistic plan. Maybe you got a raise or your side-business is taking off? That means making a rational decision about where to deploy the increased income.
Remember our rule-of-thumb for allocating your income:
- Savings: 10%
- Taxes (varies by location): 25% – 45%
- Housing: 25% – 30%
- Necessities: 10% – 15%
- Play: 5% – 10%
- Giving: 5% – 10%
Each category is important – if, if instance, you don’t allocate money to a play account your inner child will rebel and sabotage your plans! Use the percentages to see how your spending correlated to your budget and your values.
WEEK 2 – Taxes & Insurance
The second quarter tax deadline is June 15 so, if you have income that will be reported to the IRS outside the W2, it’s time to pay your taxes. Even if you do have tax deductions at your job, if you have significant income from investments or a business, you may need to make quarterly payments. You can also check with your employer to be sure your deductions are correct – if they’re too high, give yourself a raise by reducing them now instead of waiting for a refund next year!
Mid-June is also a good time to pull out all your insurance accounts and review your coverages.
HEALTH INSURANCE –
- Do you have any un-filed claims?
- How much of your out-of-pocket have you already paid?
- Have there been any changes in your life that affect your health plans?
You may want to schedule a test or treatment you’ve been putting off if you’re close to your deductible limit so your insurance will cover a greater portion. Maybe you just need to put that check-up on the calendar so it gets done this year!
CAR INSURANCE –
Have you shopped around recently? If not, you may be paying more than you should. Get one or two new quotes and review the coverages. If your car has declined in value, you may want to increase the deductible or cancel the comprehensive (only if you can comfortably cover a total loss though).
HOME/RENTERS INSURANCE –
Review and make any changes to your policy limits or coverages. Here’s another place you may want to shop around to improve your rates.
WEEK 3 – Investments
Pull out those bank and brokerage account statements you’ve stashed away this year. Now’s a good time to get your accounts set-up online so you can easily see where your money is and how your investments are performing.
There are a number of new entrants in the investment and money tracking sector of online businesses. In addition to the original online tracker: Mint.com, LearnVest.com offers account tracking as do SigFig.com and PersonalCapital.com. Betterment.com offers low cost asset management via portfolios of ETFs. MartketRiders.com allows you to design a portfolio of Mutual Funds, and WealthFront.com which uses ETFs.
Take a look at their sites, pick a couple to test drive and see if your investments are on track.
WEEK 4 – Income and Savings/Investing Planning
Now that you’ve reviewed the budget, and your risk coverages, are sure of your tax strategy and your current investments, you’re ready to plan for the next six to twelve months.
Start with the vision – what you’d like to have in your life. Then bring it on down to SMART goals – what you can realistically “see” happening in your financial life over the next few months. From those goals, make your action plans and put them on your schedule now!
END OF THE MONTH: Relax – It’s summer and you’re all set for a successful second half of the year!
Live Long and Prosper, Leah the MoneyDiva.com
P.S. What’s your favorite online money management site? and WHY? Share your experiences in the comments below!