The first day of fall was September 22, 2017. That means summer is officially over. With a little more than 3 months left in 2017, the changing of the seasons is an ideal time to take stock of your investment portfolio.
What goes into a fall financial reassessment?
To perform a financial reassessment, take the following steps:
- Gather all of your financial information. You should have a good sense of your income, expenses, savings, total debt, and investments.
- Actuate financial health. Get a grasp of your cash flows and whether they are positive or negative. Know your interest rates; are they too high? Do you have disposable income or a rainy day fund?
- Prepare a budget and stick to it. A budget can help to ensure outflows are less than inflows of cash. Cash is king!
- Create an emergency fund. At Financial Plans & Strategies, we recommend that an emergency fund contain enough money to cover at least three to six months of basic living expenses.
- Replenish your accounts. Summer is the time for vacations and fun. Summer is also a time many clients stray from their budgets or take out money for excursions. Be sure to put this money back!
Dig Even Deeper
The above points are just a starting point for you to gain an idea of your financial health. However, to ensure that your financial health remains optimal in the future so financial planning is successful, more in-depth measures should be taken. To enhance your financial health to optimal levels, incorporate these measures.
- Keep deadlines in mind. Missing the deadline of a monthly bill is not the end, even though you will incur late fees. However, missing important deadlines could negatively impact your financial planning. The Indiana College Choice 529 deadline is December 31st. To receive a 2016 tax credit, you must contribute before that date to your 529 Savings Plan. Individuals who contribute the maximum of $5,000 will get a $1,000 tax credit.
- Put aside holiday money. The holidays are right around the corner. Many families like to get a head start on shopping. It’s smart to put aside money for the upcoming holiday season. Much smarter than say, pulling money from your investments and incurring a penalty.
- Save for taxes. Are you self-employed or think you may be owing in taxes? Start putting away money now. You may be able to reduce your taxable income by contributing a small business retirement plan such as a SEP or SIMPLE IRA.
- Review automatic investment plans. Are you currently set up to contribute to an IRA or Roth IRA? Should you be contributing more to achieve your investment or retirement goals?
When it comes to finances and your financial health, planning is a major component. A fall financial assessment provides a guide to follow, helps with monitoring progress, and assists with decision-making. Financial Plans & Strategies can help you evaluate where you want to be in this upcoming season and how you want to finish out 2017.