We’re already six months into 2023. Time flies when you’re living life, especially in summer, which signals weekends at the lake, beach, or even milestones like graduations and weddings with family and friends.
Before packing up, we encourage you to go on another “adventure.” This one ensures you stay on the right track while on the road.
Summer is the season for a midyear budgeting and spending checkup.
Not something that came to mind when planning summertime fun? We get it. But look at it this way: Taking just one day or even an afternoon to review your annual budgeting and financial goals provides clarity about where you stand in making progress toward them. More important, it gives you confidence to stay on the planning path and ultimately, in greater control of your money.
Let’s start with these 7 tips.
STOP, IN THE NAME OF YOUR BUDGET.
Diana Ross and The Supremes had it right. Summer is the perfect time to stop, but in this case, not for love. Today, it’s in the name of setting a budget and financial priorities—and sticking to it.
For example, if you’ve set out to save $5,000 by year-end to pay off a credit card and are at $2,500, excellent. Stay on track; continue saving and look forward to that accomplished feeling of wiping out debt—a great way to start the new year.
Have $1,000 saved? No need for defeat. Rally and sort through your budget for ways to cut back for the next six months, like online subscriptions, dining out, last-minute getaways. They’re small, temporary sacrifices for impressive financial gains.
Feeling weak in the knees about being able to stick to your budget? Here’s 16 ways to do it.
One we really like: Continually define your why.
“Dig deep and be honest about the reasons you want to take control of your money once and for all. That’s your why. And when things get tough or boring—remember your why!”
RECOMMIT TO TACKLING DEBT.
Not all debt was created equal. Some is “good.” Some is “bad.”
Good debt is seen as a tool for building your financial future and, in the case of mortgages, attaining a piece of the American dream. Good debt consists of:
Bad debt is debt used to finance purchases that won't increase your net worth or future income. Examples of bad debt:
- Credit cards
- Other high-interest loans (or those that have an interest rate or APR of 6% or higher)
While most of us have some amount of good debt, it’s the bad debt that really weighs us down, often contributing toward lowering your credit score, which, in turn, makes it more challenging to qualify for other lower-interest loan opportunities. (See the snowball effect here?) Focus on managing and eliminating the bad debt to help stay more financially secure.
CONDUCT A TAX EVALUATION.
This year, or perhaps over the past several years, have you owed more than you expected at tax time? This summer, get ahead of the situation, because April 15, 2024, will be here all too soon. Together with your financial planner, evaluate and implement tax-saving strategies. You can even create a mock tax return to visualize withholding options and tax-saving opportunities.
CREATE ‘FUN’ BOUNDARIES.
In other words, don’t let summer get the best of your budget.
Before your next getaway, set a budget just for the occasion. Stick to it as much as you can. (If you fall off the budget bandwagon, avoid berating yourself for it. Enjoy the memories of the good time but resolve to find other small ways to make up the difference, like foregoing an expensive dinner for something more budget-friendly in the locale you’re exploring.)
REMEMBER, LITTLE THINGS MAKE A BIG DIFFERENCE TOO.
REVIEW ONLINE SUBSCRIPTIONS.
It’s hard to stay strong against subscription marketing tactics, like “just $5 more gets you uninterrupted streaming.” While $5 on its face isn’t much, multiply that cost five or 10 times over, based on how many streaming or online subscriptions you have, and it adds up. But you already know that.
Here’s what you might not realize: It will take only an hour or two to find the subscription services on your bank statements that you rarely or never use. Then unsubscribe to them—fast, before thinking twice.
PLAN FOR HOLIDAY HAPPINESS.
This summer, start putting aside money just for special holiday activities or other expenses. If you start saving now, $50 a month for six months adds up to $300! Budgeting now makes the holidays less stressful, more joyful.
ELIMINATE PAPERWORK PILES.
Take a couple of hours to toss or file your bills and other financial information that’s piled up, like receipts and credit card statements. Avoid simply re-piling the paperwork you need to keep and instead, organize it by topic in a folder in easy-to-locate storage, like a cabinet or other filing system.
TIP: While you are likely already doing this for some recurring bills, look for additional ways to make managing finances easier by enrolling in automatic payment services.
For more suggestions on how to effectively conduct a summertime budget and planning ‘checkup,’ simply contact us today. We’re happy to help.