Sunscreen? Check. Budget? Check. From lake days to vacations, summer spending adds up. Check in on your budget to stay on track.
Not something that came to mind when planning summer fun? We get it. But look at it this way: Taking an afternoon to review your budget and financial goals can help you see how far you’ve come and what still needs attention. More importantly, it gives you confidence to stay on the planning path and in greater control of your money.
1. 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. Instead, in the name of your budget. A quick financial check-in now can pay off for the rest of the year.
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. 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? One idea we like: Continually define your why. Be honest about why you want to take control of your money. That’s your “why.” When things get tough, or even a little boring, remember what inspired you to start.
2. 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 home and auto expenses. Bad debt is debt used to finance purchases that won’t increase your net worth or future income. Examples include credit cards and other high-interest loans (or those that have an interest rate or APR of 6 percent or higher).
While most of us have some amount of good debt, it’s the bad debt that weighs us down, often contributing to a lower credit score, making it 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.
3. Conduct a tax evaluation.
Have you ever owed more than you expected at tax time? This summer, get ahead of the situation — April 15th of next year 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.
4. Create “fun” boundaries.
Before your next getaway, set a budget for the occasion. Stick to it as best you can. If you fall off the 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.
5. 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 five or 10 times over, based on how many online subscriptions you have, and it adds up.
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 from them fast, before thinking twice.
6. 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 and more joyful.
7. Eliminate paperwork piles.
Take some time to toss or file your bills and other financial information that’s piled up, like receipts and credit card statements. Organize it by topic in a folder in easy-to-locate storage.
Tip: While you are likely already doing this for some recurring bills, look for ways to make managing finances easier by enrolling in auto-pay services.
A midyear money checkup doesn’t have to feel like a chore. Think of it as a chance to pause, celebrate your progress, make a few adjustments, and feel more confident about where you’re headed. A little attention now can make a big difference for your financial goals later.
Lindsey D. Rhea, CFP, is owner and wealth strategist at Alia Wealth Partners, connect@aliawealth.com.
