For many of us, the financial goals we set in January are a distant memory by June. That New Year enthusiasm can become dulled by the stress and reality of everyday life.
But you don’t need to wait until next New Year’s to get excited about your goals again. Summer is the perfect time to get reacquainted with your goals, and see if you need to make any changes to get back on track.
Checking in with your financial goals: Where are you now?
Some people start to feel like they’re behind on their goals anyway, so what’s the point of looking at the numbers to face the reality? The truth is, only good things can come from looking at all your accounts, your spending, your savings, etc., and seeing exactly where you are right now.
If you’re doing better than you thought, great! That might give you the motivation to find what’s working and keep going.
If you’re behind, then you know exactly where you’re falling behind. That’s valuable information, because it shows you what areas need attention as you get back on track.
Dust off those financial goals
A lot can happen in six months. Your life and your financial situation is probably a bit different now than it was at the beginning of the year. Take a look at the goals you set for yourself, or the systems you had put in place. Do they still apply? Sometimes you stray from your goals, but they still work well for your overall vision.
But if you’ve had some life changes or figured out that certain goals aren’t a good fit, this is a great time to reassess and adjust if necessary.
Find some tax savings
While your taxes are fresh on your mind, you can use this time to organize your paperwork, checking your withholdings and evaluating your tax-savings strategies.
One of the simplest ways to cut down on your tax liability is to save for retirement. Whether you’re contributing to a pre-tax 401(k), 403(b) or a traditional IRA, those savings will help to decrease your taxable income. And you work that into your budget to make sure you’re allocating more funds to those accounts for the rest of the year.
(Note: You can enroll or change what you’re contributing to your retirement accounts throughout the year. You typically do not have to wait for open enrollment to make those changes.)
You can also contribute to a health savings account (HSA) or flexible spending account (FSA). HSAs are tax deductible, meaning whatever you contribute can lower your taxable income. FSAs, on the other hand, are funded with pre-tax dollars, meaning you won’t have to pay taxes on that money if it’s used for applicable expenses.
See my post about lowering your tax bill for more ideas.
Check Over retirement savings plans and health insurance
Open enrollment begins in the fall, so you can use the summer to assess your benefits and make sure they’re working for you. Review your health insurance spending and retirement savings for the year, and make note of any major life changes this year.
Also, if you do have a healthcare FSA or a dependent care FSA, make sure you’ve filed your claims so far for the year.
Having that information ready will make it a little easier to know what changes you need during open enrollment.
Review your budget
According to the CFP Board, 59 percent of Americans are not tracking their spending, and two in five people have never had a budget. Of those who do track their spending or keep a budget, 62 percent said they felt more in control of their finances, and 55 percent said they felt more confident with their money.
Everyone, regardless of how much money you make, needs a budget of some kind. And the best time to make one is right after you review your financial goals for the year. Your budget is meant to support those goals.
So if you want to save more money for retirement, for example, you can allocate a certain amount of money each month to go to that. Or, if you see that you’re overspending in certain areas, you can give yourself a spending cap moving forward.
Here are some blog posts about budgeting that go more in depth about setting up a successful budget:
Work on your financial goals mindset
If you’re feeling overwhelmed or behind on your goals, it can be easy to give up and try again next year. Instead, you could remember that it’s never too late to start again, and that those setbacks can teach you a lot about what does (and does not) work for you.
After you’ve looked over your budget, savings and goals progress, you might notice some areas where you’re struggling to hit certain goals or stay consistent. Now is the time to try something new, make changes, or enlist help to get back on track before the end of the year.
Here are more posts that might help you get a handle on your money goals:
- How to Treat Yourself Without Blowing Your Financial Goals
- How to Stay Motivated to Hit Big Financial Goals
- Roundup: How to Set Achievable Financial Goals
About Your Richest Life
At Your Richest Life, Katie Brewer, CFP®, believes you too should have access to financial resources and fee-only financial planning. For more information on the services offered, contact Katie today.
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