If you want to improve organization of personal finances, it's important to be alert and engaged in your money habits throughout the year. In addition to monitoring account balances and cash flow, consider performing a more formal review of finances half way through the year.
A mid-year review is an opportunity to make adjustments to earning, spending, and saving behavior to ensure alignment with annual goals. The simple act of dedicating time to financial matters can also help strengthen resolve and overall long-term organization and efficiency. Here are six tasks to tick off on your mid-year checklist:
1. Review Spending & Income
Look back over spending in the first half of the year to look for patterns that affect the bottom line. Has income changed? Is spending on budget? Did any large, unexpected expense come along?
2. Check Insurance Coverage & Costs
Review policies to make sure that each is at an appropriate level of insurance coverage in light of recent life events such as, getting married, buying a house, having a child or changing jobs. It's also important to keep beneficiaries up to date as a family changes. If premiums are creeping up, it may be time to get quotes and switch to more affordable carriers.
3. Track Tax Obligations
Have a conversation with your tax preparer and be mindful of any events that may affect your annual tax bill. If so, it's wise to set money aside to meet the tax obligation now.
4. Review all Account Ownership/Titling by Reviewing the Name(s) Listed on Account Statements and/or the Tax Filing Documents Issued for the Prior Tax Year
If married, is the spouse listed as a join owner or as a beneficiary on non retirement accounts? Also look for the same investment or stock held in different names.
5. Adjust Savings
No matter how more money has come: through earnings, inheritance or other happenstance, bump up the amount contributed to savings.
6. Monitor Retirement Funds
Review retirement plans, check to see that assets are distributed in accordance with risk tolerance. Review and update the beneficiaries on each retirement plan account and consider consolidation if there are plans with prior employers. If you are over age 70, make sure you are withdrawing required minimum distributions (RMDs) from your retirement plan or IRA in accordance with IRS guidelines to avoid penalties.
Stepping back mid-year to check in on these six areas will help you be more disciplined, focused, and to have a more organized financial life. Your financial adviser can walk you through a mid-year review and provide valuable guidance to help you to stay true to your monetary intentions all year long.
Judith C Singer, CRPC®, is a Financial Advisor with Ameriprise Financial Services, Inc. in Beachwood, Ohio. She specializes in fee-based financial planning and asset management strategies and has been in practice for 30 years. To contact her:
Ameriprise Financial Services, Inc.
3401 Enterprise Parkway
Beachwood, OH 4412-7341
O: 216.464.5545 | F: 216.464.7624
Ameriprise Financial and its affiliates do not offer tax or legal advice. Consumers should consult with their tax adviser or attorney regarding their specific situation.
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