5 questions for a summertime financial checkup

"Summertime and the livin’ is easy." Ella Fitzgerald’s famous lyrics illustrates the slower pace that many Americans assume during the summer months.

For many families, summertime means vacations that have been planned and anxiously anticipated for months. But summertime also marks the halfway point in our calendar year. As we pass the mid-year mark, it’s a good idea to use some of your “down time” to conduct a financial checkup to ensure you’re on track for a financially successful year. 

Just ask yourself these five questions:

1. Are you contributing to a retirement plan?

Are you contributing enough? The type of plan you participate in determines how much you can contribute each year. If your employer offers to match a portion of your contributions, are you contributing enough to get all of those free dollars? If you are 50 or over, are you taking advantage of the catch-up provisions of the tax code? Consistently contributing to your retirement plan will pay off greatly later and most of us can achieve this through payroll deduction, making it one of the simplest ways to save for our future.   

2. What is your annual budget for charitable giving this year?

For those in high tax brackets, charitable donations can significantly reduce your federal income tax bill while providing you and your family with an opportunity to make a positive impact on the life of your community and the lives of other people. Check how much you donated during the first half of the year and develop a plan for the dollars that you’ll donate before year-end.

3. Have you checked your credit report this year?

If you haven’t, go to www.annualcreditreport.com to request a free copy from each of the three credit reporting companies. Carefully check to make sure that all of the information is correct and up to date on each report. Credit reports can affect your mortgage rate, credit card approvals, insurance applications and even job applications. Suspicious activity or accounts you don’t recognize can be signs of identity theft. Review your credit reports and catch problems early. 

4. How is your emergency fund doing after the first six months of this year?

Did you have any unexpected expenses that required dipping into your cash reserve? If so, start working on restoring that balance. Most of us should have three to six months of living expenses in some type of savings account that serves as our emergency fund to protect against an unforeseen financial blow.

5. Has anything about your life changed this year?

A change in your marital status, health, employment or benefits? A new child, grandchild or home? Have you received an inheritance or established a college-savings plan for your children? An event like any of these can necessitate adjustments to your will, insurance coverage, retirement planning, tax status, investments and more. And if you have experienced a signification change in your lifestyle, have you told your financial adviser? Each time you meet with your financial advisor, he or she should enquire about these changes — but don’t wait for them to ask. Schedule the appointment and find out what, if any, adjustments and fine-turnings should be made to your financial life.

These five checkpoints can be quickly reviewed so that you can get back to relaxing and enjoying your summer, while having the added peace of mind that you are on track financially for the remainder of the year! 

Phoebe Venable, chartered financial analyst, is president and COO of CapWealth Advisors, LLC. Her column on women, families and building wealth appears every other Saturday in The Tennessean.

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