Though it probably seemed like only yesterday when you were ringing in the new year, suddenly we're hurtling toward the end of June. And that can only mean one thing: You have just six months left to ensure that you meet your financial goals for the year. Here are five moves you'll want to make today.
1. See how your budget is holding up
If you were responsible enough to create a budget earlier this year, you've hopefully been reaping the benefits of having an easy way to track your spending and identify savings opportunities. But since expenses can evolve over time, it pays to take another thorough look at your budget and see whether it's realistic.
For example, if you budgeted a certain amount for commuting costs but are now paying much more at the pump, you may find that you're exceeding the figure you initially allocated for transportation -- in which case, you may want to reduce another spending category to allow for that increase. The key is to make sure that your budget actually aligns with your expenses, and just as importantly, that you're doing a good job of following it.
2. Check your investments' performance
Obsessing over your investments and acting hastily every time they drop in value is a good way to increase your chances of losing money. At the same time, you don't want to ignore your investments because if it turns out their performance has been lagging for months, you may want to shift things around in your portfolio.
That's why the midpoint of the year is a great time to review your investments -- those held in your traditional brokerage account, as well as your retirement plan -- and make sure they're not only doing reasonably well, but also meeting your needs. For example, if your risk tolerance has shifted over the past six months and you've grown more comfortable with the idea of stocks, you may want to swap some of your safer bond investments for stocks, which have the potential to deliver higher returns.
3. Review your retirement plan contributions
Saving consistently for retirement won't just help ensure that you have enough money when you're older, it'll also serve as a crucial tax-saving opportunity at present. That's because traditional 401(k) and IRA contributions result in an immediate tax break, and one that could make a huge difference in your total 2018 IRS bill.
This year, you can contribute up to $18,500 to your 401(k) if you're under 50 or $24,500 if you're 50 or older. If you don't have a 401(k) and are saving in an IRA, you can put in up to $5,500 if you're under 50 or $6,500 if you're 50 or older.
You technically have until the end of the calendar year to finish funding your 401(k), and you actually have until next year's tax filing deadline to fund this year's IRA. But it's generally a better idea to save evenly along the way than neglect your retirement plan and assume you'll play catch-up later on. Therefore, see what you've contributed to your retirement account to date, and if it's not roughly half of your total goal, work on immediately ramping up.
4. Examine your paycheck
As part of the recent tax overhaul, almost all individual tax brackets were lowered, which means that a large number of Americans should've seen more money in their paychecks over the past several months. If you've yet to examine your paycheck to look for that increase, now's a good time to do so.
If you aren't seeing that extra cash, it could mean that you need to adjust your withholding on your W-4 to get more money upfront. Otherwise, you're apt to wind up with a sizable refund next year. While that might seem like a good thing in theory, it's actually the opposite in practice.
5. Read your credit report
You never know when you might find yourself in a position of needing to borrow money, whether it's to get a car, buy a home, or snag a business loan. The better your credit, the greater your chances of success when it comes to getting approved for any sort of financing. That's why it's crucial to review your credit report and ensure that it's accurate.
It's estimated that 20% of credit reports contain errors, and if yours has one that works against you, it could lower your score and ruin your chances of getting to borrow whatever funds you might need. If you've yet to check your credit report this year, request your free copy online and study it thoroughly.
The midpoint of the year is a good time to give your finances your own personal inspection. Tackle the above moves, and with any luck, you'll find yourself in great financial shape by the time 2018 comes to a close.
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