September 11, 2016
September 11, 2016
As the summer season winds down, there's no better time than the start of autumn to take a look at your finances to see where adjustments can be made. Consider these 10 money moves to make before the leaves change.
1. Get Back to Budget Reality
Summer activities can put budgeting on the back burner as we spend more and save less over vacation. A little splurging or a savings vacation isn't the end of the world, as long as it isn't a permanent getaway that drains your accounts. With autumn right around the corner, however, now's the time to get back to basics and rein in spending. Summer can be expensive, but you can regain control of your money by coming up with a spending plan that helps you curb impulse buys and save more of your income for a rainy day.
2. Start a Holiday Fund
The beginning of fall means the holiday season is only three months away. As you revamp your budget, start putting money aside for the end of the year. Whether your plans include taking an end-of-the-year vacation or buying gifts for loved ones, early planning can ensure enough cash so that you don't have to rely on credit cards.
3. Ask About Flat-Rate Billing
If your gas or electric bills trigger heart palpitations, talk to your utility company about flat-rate billing. The company looks at your past electricity or gas usage and uses this information to estimate your expected usage over the next year. Based on this estimation, you're charged a flat rate for the next 12 months. Flat-rate billing protects against higher utility bills during the winter and summer months, and as a result, budgeting is easier because you know exactly what you'll owe each month and there are no surprises.
4. Review Your TV Habits
Fall signifies that start of the new prime time television schedule -- one of my favorite parts of the change of seasons. This is an excellent time to evaluate your TV viewing habits to see if you can do without cable, downgrade your package, or otherwise modify your home-entertainment budget to better suit your needs. With so many options these days, you can likely stream many of your favorite shows at a price that's far less than cable.
5. Pay Off Summer Debt
Carrying credit card debt from month-to-month is expensive. If your credit cards took a beating over the summer, come up with a plan to eliminate this debt. Give your credit cards a break and pay for everything with cash, and then cut back on unnecessary spending to free up cash in your budget. Use the savings to double or triple your minimum payments and pay off balances sooner.
6. Prepare for Colder Days
Temperatures cool down around September and October, so to trim your heating bill, take steps early in the season to keep the heat in and the cold out. This includes replacing missing insulation in the attic, weatherstripping your doors and windows, sealing any cracks around windows and electrical outlets, installing a storm door, hanging heavy drapes, getting a programmable thermostat, and closing your fireplace flue.
7. Check Your Savings Contributions
If summer fun threw off your savings goals, you can play catch-up by taking advantage of your company's retirement plan, or increasing your contributions if you already have a 401(k).
"An employer may offer to match a percentage or all of your contributions to a retirement account," says Jim Poolman, retirement expert and executive director of the lndexed Annuity Leadership Council. "Some employers may even contribute to your retirement account each year whether you save or not." Any employer retirement contribution is considered "free money" and can maximize your savings at any age.
8. Balance Your Portfolio
In addition to contributing or increasing contributions to your company's retirement plan, you should get serious about balancing your portfolio to protect against market shifts. It isn't enough to have a 401(k). Poolman suggests adding more conservative, low-risk products, such as fixed indexed annuities (FIAs) to balance your retirement portfolio.
This is important as you become older, because a savings strategy that worked in your 20s might not be the right fit in your 30s or 40s.
"Assessing your investment mix at different stages in your life is key," Poolman warns. "When you're young, a higher-risk investment strategy may be more effective, whereas the closer you are to retirement, the more important a low-risk portfolio may be."
9. Have a Money Talk With Your Partner
It's also important to sit down with your partner and/or a financial planner to review your overall financial picture and determine where you can improve. For example, when was the last time you reviewed your life insurance policy? If you've recently tied the knot, had a baby, or purchased a home, can you increase your coverage? Or if you're self-employed, could you increase contributions and max out your IRA, which can grow your money and help you save on taxes? A yearly review can ensure a firm financial foundation and help you hit your goals.
10. Make Doctor's Appointments
A flexible spending account (FSA) lets you set aside a percentage of your pretax pay for eligible out-of-pocket medical expenses. These accounts effectively reduce health care costs for doctor appointments, prescription medications, vision care, and dental care. You can withdraw funds to pay for covered expenses. The catch, however, is that funds in a flexible spending account must be used in the plan year. Some employers don't allow funds to carry over into the next year, or they only allow employees to carry over $500. If you don't use the money, you lose it. So with three months left in the year, schedule your doctor, dental, and vision appointments to avoid forfeiting your unused balance.
This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website.
Copyright 2016 The Kiplinger Washington Editors
This article was written by Wisebread.com and Mikey Rox from Kiplinger and was legally licensed through the NewsCred publisher network.