June is over and we’re officially half way through 2014. Summer vacations are in full swing and New Years resolutions are long behind us in many cases. It may be hard to do with all that you’re currently juggling, but it’s time to focus on your mid-year financial checkup. If you were with us in January of this year, you learned How to Get Financially Organized in the New Year. Many people may have labeled 2014 as “the year to pay off debt” or “the year to get my financial house in order” and likely kicked off the year with a list of steps to take and tasks to complete. Now it’s time to reevaluate your intentions and take a good look at where you stand by reviewing the following: Note: For a checklist to follow on your own, download the free Money Organization Workbook.   

1)    Spending Plan: Have you set one up? Cash flow management is the key to a successful financial future and knowing where your money is going is a must in creating a plan. If you haven’t created a spending plan for yourself yet, go the old school route and use Excel to start tracking spending or use an online program. Pay attention to amounts you have going out for fixed expenses, such as your mortgage / rent, car payments, insurance premiums, and utilities and make sure you’re paying yourself first prior to going big on variable or discretionary expenses such as entertainment, clothing, extracurricular activities and other miscellaneous items. Why is tracking your spending important? Because it allows you to pinpoint the areas and categories where adjustments may be needed (i.e. decrease dining out in order to put more towards savings for travel or a home down payment).

2)    Debt Management: Have your credit card and personal debt balances decreased or increased since January 1st? Review your statements to track any progress you’ve made in the last six months. Going forward, debt pay down should be done either with priority given to those accounts with the highest interest rates first (meaning any extra funds go towards this balance) or by utilizing the “snowball” method which targets lowest balances for payoff first. Your spending plan comes into play with debt pay down. Review where your money is going and target any areas that can be cut back to help you accelerate payoff.

3)    Savings and Investments: Is your emergency fund of 3-6 months worth of expenses fully funded or are you working towards that first $1,000? What about taking advantage of employer retirement plans and contributing to your company 401(k)? If you haven’t, take time immediately to set up a systematic transfer from your paycheck to your savings or investment account and “forget” about it. For Roth IRA’s and employer retirement plans, saving in smaller, automated increments minimizes your cash flow strain and sets the stage for a disciplined investment strategy going forward. Now is also the time to review the allocation of your investment accounts and make any necessary adjustments or rebalances.

4)    Personal & Asset Protection: I’ve heard it before – “It won’t happen to me.” Maybe it won’t, but if it does, there’s nothing that can send your dreams off course faster than not having adequate insurance coverage in a time of need. If you’re single with no dependents – make sure that you’re covered for disability (protecting your human capital is HUGE), health, home, auto and personal liability.  If you’re married and/or have others counting on your income, make sure to add life insurance to that list. If you’ve been putting off a review, reach out to your insurance agent or broker to ensure you have adequate coverage. Be sure to take into account updates that should happen for life transitions such as marriage, birth of a child, job loss, increase in income, home remodel, big ticket purchases, death, or divorce.

5)    Estate Planning & Other Important Documents. Have you taken the time to get your estate planning needs and wishes documented and in place? If you haven’t reviewed or created your family trust, wills, or power of attorneys, now is the time to do so. If you have children, guardianship provisions should also be in place. This is a gift that will benefit those you leave behind or those left in the drivers seat temporarily. The more clear and concise you can be with your intentions, the better. Although this type of planning may make you feel uncomfortable, it is increasingly important for your family and yourself that you have a current plan outlining your wishes and specific requests in place. Don’t worry if you discover you’re a bit behind on some of the above. Getting yourself on track financially is a journey, not a race. Set small goals and tasks for yourself and remember to celebrate wins along the way. Ready to get to work on your own? Download your free Money Organization Workbook complete with checklists and action items.