Summertime financial planning triage

Senior Resources

This time of year, you may be focused on how you’ll pay for your summer vacation, or perhaps where the money will come from to make repairs to your cabin or vacation home. Financial planning experts say this is also a good time to look at your overall financial health. Yet according to a survey conducted by a major financial services firm, people are as likely to spend time thinking about their vacation (28 percent) than about retirement planning (25 percent). It may be time to adjust your priorities.

“Summer should be one of those milestone times when you stop to consider what you can still change before the end of the year,” says financial advisor Nicole Middendorf, CDFA, author of Lipstick on the Piggy Bank. “It’s natural to want to spend money on your family cabin, for example, because you want to maintain it for your kids. There’s an emotional tie. In the same way, most of us are willing to spend a little more to have a great vacation because we feel we deserve it.”

But what about the bigger financial picture? “Compare what you are spending on your family vacation with how much you’ve saved for your kids’ college educations. Is it out of balance? To put your spending in perspective, it may be time to conduct a financial triage.”

Middendorf says that the halfway mark of the year is a great time to evaluate everything from savings to taxes. “What have you done about your New Year’s resolution to take care of your financial wellbeing? How much have you contributed to your 401K or other retirement plan? If you have contributed less than the maximum, there is still time to catch up. If you are paying estimated taxes, it’s time to determine if you should put away more or less. If you own a business, send your books to your CPA now so that you can make any necessary midcourse corrections.”

She adds that many people have been saving for years, only to realize too late that they don’t have enough money put away. “Spend more time this summer thinking about assets, such as your life insurance policy, that you don’t have an emotional tie to. How does it fit into your estate plan? Do you even still need it? Have the premiums become a financial drain? There may be an opportunity to increase your financial security by selling your policy on the secondary market, with the help of companies such as GWG Life, LLC. Doing so may yield far more than the policy’s surrender value.

Finally, if you are still paying off last year’s holiday credit card bills, Middendorf cautions that the next holiday season will be here sooner than you think. “Devise a plan to pay off the credit cards with the highest interest and balances first. I guarantee you that it will feel less stressful once you start seeing the balances decrease. Then if necessary, put a little extra aside each month to build up a holiday fund so that you won’t find yourself in the same predicament next year.”

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