Tuesday 13 August 2013

3 SMART MOVES TO MAKE THIS SUMMER            

For most people, summertime conjures up images of lounging on the beach or going to parties. With the relaxed attitude of the season, it's easy to justify splurges on sandals, swimwear and other summertime treats. A lot of times, we'll see expenses increase in the summer because people are looking to take a vacation and enjoy the warmer weather. But you don't want a financial lifestyle that leaves you hard-pressed. With a little time and discipline, your finances can be improved come fall. Here's a look at several savvy money moves to make this summer:

1. Review your spending. July 1 marks the halfway point of the year, so it's a good opportunity to analyze your spending over the past six months and adjust as needed. Also consider the following questions: "Are you spending money on things that really matter? Are you being intentional with your money? Are there leaks? Did you end up having unexpected expenses?"

Identify your financial and personal goals and determine whether your spending aligns with those goals. This can help ensure you're "consciously funneling money to the things that are important instead of frittering money on things that aren't important. For instance, you're spending money on a car, or gym membership or any other thing you no longer use. Dispose of these expenses so that money will be available for needful things.

2. Start planning for the holidays.  To avoid holiday-related debt, start saving now. Create an account specifically earmarked for holiday purchases such as gifts and travel. Start with the amount spent last year and adjust up or down, depending on your anticipated spending. Then divide by the number of months until the holidays.The whole idea is that you're setting aside money each month to meet those expenses. This will prevent you from having a huge hole in your pocket.

Another reason to start planning now is to avoid overspending on last-minute gifts or travel purchases when time is at hand and you only have a few options. If you're planning to save money by knitting, sewing, painting or otherwise making gifts, it's also smart to give yourself a good head start.

3. Revisit your retirement contributions.  Start contributing to a retirement account, if you are not contributing to a retirement account, start now. Compound interest will be more robust, if you have years of contribution on your side. It's not how much you save, but how long. Starting sooner than later will pay huge dividends.

If you are contributing to an employer-sponsored retirement account such as superannuation fund, increase your contributions, especially if you aren't getting the full employer match available to you. Some employers allow you to adjust retirement withholdings at any time, while others may only give you the option twice a year. If your employer operates on the fiscal year calendar, July 1 may be a key date to remember for tweaking your withholding.