Summer's here, and the time is right for vacations, outdoor activities, and fun. It's also a good time to consider a few financial matters.
Here are some questions to ask yourself mid-year:
1. Are your Goals still the same this year?
- Has market volatility affected your goals? It's important to note any changes since the first of the year that may warrant reviewing your goals.
- You may have experienced unexpected events in the past few months, both positive and negative, that could impact your goals. These events can include anything from marriages, deaths, births, health issues, health breakthroughs, and everything in between.
2. Is your Credit Score looking good?
- Double-check your credit score for any red flags. This can be a good way to catch issues like identity theft early.
- Each credit card company uses credit reporting to provide you with your credit score for free with no negative impact to your score for checking.
- For example, Capital One has a partnership with CreditWise, which shows one's TransUnion credit report and VantageScore 3.0 credit score for free. CreditWise allows you to see the potential impacts of financial decisions on your credit score before making them with their CreditWise Simulator.
3. Are your Contributions on track?
- Consider increasing your contributions to any personal or workplace-sponsored savings plans if it suits your goals.
- Chat with your financial advisor to make sure you're making the most of your accounts.
- To take full advantage of employee matching, you will need to contribute the highest percentage your employer matches. Each company is different, but typically you can contribute as little as 1% to receive a match.
- For example, in the below scenario, you are able to contribute as little as 1% to receive a 1% match. You are able to contribute up to 6% to receive a 5% match.
- 1% contribution - 1% match
- 2% contribution - 2% match
- 3% contribution - 3% match
- 4% contribution - 4% match
- 5% contribution - 4.5% match
- 6% contribution - 5% match
- For example, in the below scenario, you are able to contribute as little as 1% to receive a 1% match. You are able to contribute up to 6% to receive a 5% match.
4. Does your Scheduled Spending still make sense?
- Look at any impacts you've felt due to market volatility. Do your plans for the rest of the year align with reality?
- Unexpected spending is bound to happen. Maybe you need a new roof, a new septic, have had a car accident, or received a new health diagnosis in the last six months. Either way, it's imperative to stay mindful and aware of your scheduled spending to ensure your budgeting makes sense.
Conclusion
A lot can happen in six months, and it's important to stay on track and not let things slip through the cracks. Living life on 'auto-pilot' is something that we all fall into from time to time. However, holding yourself accountable and being mindful of your goals, credit score, contributions, and spending can significantly impact your financial situation in a positive way. If you find yourself struggling to do so, set a reminder for yourself to review these aspects monthly or every six months to ensure you're on track. Alternatively, scheduling meetings with your financial advisor more than once a year would also be extremely beneficial.
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