Summer can be a great time to conduct a financial checkup.
There are 5 very easy things to do right now that could fine tune your financial picture, and they are relatively painless and quick.
Health Savings Account
If you are healthy and have a healthy lifestyle, this could be a great account to open during your employer’s open enrollment.
An HSA (combined with a High Deductible Health Plan) allows you to have a funded account with pre-tax money that is yours (just like your 401k is yours), that you contribute to on a frequent basis (payroll deduction if it’s an employer plan), that builds through time and can be used for future health care needs.
Summer (3 months before open enrollment) is a great time to get this information from your Benefits Department.
Increase your Retirement Contribution by 1%
This one is so easy and fast but the impact to your financial future is enormous. It’ll take little time to log in and increase the contribution by 1%. Already at the (2011) $16,500 annual maximum ($21,500 if you are 50 or over)?
Then increase or open an IRA (Roth or Traditional) and start funding it with at least $100 a month just to get started.
College Savings Plan
If you have children and have already started a plan, congratulations! Now increase your contribution by $100 a month.
But don’t beat yourself up if you haven’t opened a plan yet. Just find a plan that has low costs and funds with low expense ratios. Then, decide on a monthly contribution amount ($100?) and contribute to it monthly.
The idea is just to get started and to make it a habit; modifying amounts once the habit is in place is easier than getting the habit established.
Home Refinance or HELOC
If your loan is in the mid 7% range or more and if you are not underwater, consider refinancing. Also, if you do not already have a HELOC, and feel you will not be tempted by one, consider opening one to have available for a future need.
The paperwork and the process is a bit cumbersome, but the decision itself should be pretty easy to make.
Umbrella Liability Insurance
Contact your homeowner’s insurance agent and get a quote (it’s incredibly cheap insurance) and buy it. Really, this one is pretty straightforward and a great value, as you get alot of protection for very very little cost.
These are some very easy, quick things to do that should lead to an improved financial future for you, will allow you to enjoy the rest of your summer, and get you ahead of the game.
Next Step
Ready to take the next step and work with a fee-only CFP? Reach out to schedule a Discovery Meeting to learn more.