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July 2008 |
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Your Midyear Financial Checkup July 1 marks the midpoint of 2008. Time to ask, "How am I doing with my financial goals?" None of us can afford to lose a year and a midyear checkup is one more effort against ending up in December wondering where the year and all the money went. Sometime this month, be sure to face up to these key questions. Has my debt been paid down as planned? Hopefully, in January you knew your total (non-mortgage) debt and set a goal to have it paid down by 10% or more by the end of the year. At this point, you should be roughly half way toward that 2008 goal. If you're on track, move on to the next checklist item. If you're falling behind, figure our where the train came off the tracks and correct it. What are you going to do about the holidays? For those of us on tight budgets, the holiday season wreaks havoc on our finances. Parties, gift giving and travel can blow a year's worth of financial discipline in a big way. Sure, we promise ourselves we won't go overboard, but there's something about the end of the year that demands a big finish. So this is our recommendation: Plan to spend a specific amount and save for it. You've got five months to squirrel away something for December. Where does my credit stand? Checking your credit is easier than ever. And with identity fraud being a frightening reality, it's never been more necessary. Check your credit at least once a year and make sure there are no mistakes in your history. To find our more, visit www.knowyourcreditreport.com. How's my emergency fund? Is your emergency fund at the desirable level? Have you tapped into it for anything in the first half of the year? If so, are you on track to get it back to the necessary level? Some say your emergency fund should cover three month's living expenses in case you lose your job. We at Debt Matters think that's a little high, (Will you be fired without any severance or healthcare? Will it really take 12 weeks to find a new job?). But your fund should at least be able to cover any major repair to your home such as a new roof or a new furnace. Am I properly insured? As every coastal state from Texas to Florida to Rhode Island is aware, the 2008 hurricane season has begun. That should remind us all that sound financial planning includes protection of our assets. Is your life insurance at an adequate level? Are you still paying hundreds of dollars on collision insurance for a car that's only worth $2,000 if it's totaled? Will your homeowner's policy cover the total cost of rebuilding your home in case of total loss? (Keep in mind, construction prices have risen dramatically in recent years.) What have I learned this year? Generally speaking, the more people know about money the better they are at earning it and holding on to it. If your goal is financial freedom, you should be reading a few books or magazines on money management. What have you read so far in 2008? Summer time is the perfect time to start. If you haven't already this year, visit the library and find a financial book that interests you. |
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