5 Step Summer Financial Checkup

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It seems like when summertime hits, time slows down. The hustle and bustle of the holiday season is over, the taxes are complete, and the vacation days are scheduled. If you find yourself with a bit of extra time on your hands in the upcoming months, you may want to use this opportunity to check in on your family’s finances. While doing a thorough analysis of your wealth may sound intimidating, we’ve broken it down into five simple steps to keep you on the path to your secure financial future.

Step 1: Analyze Your Budget

There are a lot of great tools to track spending down to the penny, such as Mint and You Need a Budget. Many credit cards or banks will offer categorical breakdowns of your spending, which can be a great way to find out what you’re spending the most money on and if there’s room to cut back. To get the best look at your spending habits, you may want to evaluate your savings and spending record over the past six to 12 months to see longer term trends. Many of our clients are not necessarily overspending, but they are unclear on where their money goes, and many traditional budgeting tools are less applicable for more affluent people. We are presenting a session next week to be a broad survey of budgeting tools for higher income spenders, tune in, and perhaps you can find something that works for you.

Step 2: Consider Your Debt

An alarming 62 percent of adults have carried over credit card debt in the last 12 months. Credit card debt is an easy enemy to attack, and it’s almost always in your best interest to drive that balance down. Surprisingly, some other debt might be ok. Our modeling often shows that not paying off a mortgage might be the better long-term approach. At your next Observatory session, we can model various scenarios, and you might be surprised by what you learn. We understand, however, that the answer on paper is not always the one that feels best, and even if the numbers say to keep a mortgage or student loan payment, we understand it might be best for you to extinguish them. You won’t know until we take a look together.

Step 3: Evaluate Services

Many of us let our recurring bills go on autopilot. It used to be you could buy software that might be good for a few years before needing an upgrade. Then it went to annual subscriptions. Now monthly subscriptions are common, and they can be deceiving:  $9.99 a month sounds much different than $119.88 per year. Things like internet, cable, and wireless services are pretty necessary, but there are likely many subscriptions you’ve forgotten all about. If you tend to set up auto payments and forget about your monthly bills, this could be an opportune time to revisit what it is you’re actually paying for. 

Step 4: Revisit Short and Long-Term Goals

A lot can change in a year – marriage, death, divorce, growing your family, and experiencing a major career change. Even seemingly small adjustments, like a job promotion or sending a kid off to college, can significantly impact your financial status. That’s why it’s important to regularly review your long-term goals and progress towards them while revisiting and evaluating your shorter-term goals as well.

Step 5: Think about what retirement means to you

The biggest goal for most people is retirement, but what does that even mean today? One prominent financial personality talks about a retirement poster showing people drinking margaritas on the beach. What happens next? Will you have another margarita? Three? How many days can you sit on the beach before you’re bored out of your mind? Increasingly retirement doesn’t mean a lifetime of hedonism, it simply means a step away from full time salaried work into other paid or volunteer roles. Think about if you’d like to work part time, or consult? Are your expectations of workload and pay realistic? We can model and plan for anything here at Telarray, but it’s often harder to create a goal rather than work towards one. If you have a clearer idea of what you want, you might find in your next Observatory session that a step away from your traditional career path could be closer than you think.

Summer is typically a slower time financially, but it’s a great time to think about all these things. As always, we look forward to your next Observatory session to consider some of these questions and stand by to help with anything that comes up in the meantime.


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