Summer is here. Children are out of school. The weather is hot. Half of the year is already gone. Summer vacations are happening. People are starting to look ahead at what’s coming for the rest of the year.
If you find yourself indoors on a hot and humid afternoon, there are several little financial tasks that are worth completing. Here are five personal finance tasks that you should consider tackling in the heat of the summer.
[See: 10 Summer Savings Tips.]
Check your tax withholding. Take a look at your tax withholding from your workplace. Does it actually reflect the current state of your life? Are you withholding taxes for the correct number of dependents?
Withholding for too many dependents means that you’re probably paying taxes each April, whereas withholding for too few dependents means your paycheck is smaller than necessary, and you’re effectively giving the government an interest-free loan each paycheck. Neither one is a good situation, so make sure your withholding is correct on your W-4 form.
Even if there hasn’t been a change in your dependents recently, it’s still worth checking into, particularly if you’re consistently getting a sizable tax return each year, or if you find yourself paying taxes each April. Your number may have been incorrect for a while.
Check your retirement savings. It’s a good idea to take a peek at your retirement savings once every six months or so, and if you’re doing that as part of an annual financial review (say, during your winter holiday break), a hot summer afternoon is the perfect time to take another look.
[Read: Keep Your Money Goals on Track With a Midyear Financial Checkup.]
Mostly, you’re just checking to make sure things are in order and as you expect. Are your contributions being deposited as you wish? Are you happy with your investments? Are things projecting outward to a healthy retirement?
If things look good, this should only take a moment. If things aren’t going the way you want them to go, then you may have some changes to think about.
Start saving for the holidays (if you’re not already). It’s may be hard to believe, but the winter holiday season is just five months away. For many people, the winter season means some very big expenses, but those expenses can be reduced by starting your savings now.
For example, if you start putting aside $200 per month now, you’ll have $1,000 in cash to spend during the holiday season on gifts and travel. That’s far better than trying to cough up $1,000 in December or having to rely on credit cards to make it through, leaving you dealing with debt.
Make a rough holiday budget now and start saving throughout the summer and fall. You’ll be glad you did.
Take advantage of tax-free holidays. Many states offer tax-free holidays during the summer, particularly in the late summer. These tax-free holidays are often designed to reduce the impact of back-to-school shopping on cash-strapped families, and smart retailers jump on board, often competing with each other to offer the best sales to attract those bargain-seeking customers.
Take advantage of this by finding out what tax-free holidays are coming up in your state and see if you can take advantage of them. For example, Iowa traditionally has a tax-free holiday on clothing at the start of August, meaning that it makes a lot of sense to buy apparel then because you avoid sales tax and you can take advantage of many sales.
[See: Avoid These Common Pitfalls During the Back-to-School Shopping Trip.]
Live lean to pay off vacation debts. If you did any travel this summer, you’re likely carrying some debt from that trip. Rather than letting that debt ride on your credit cards, now’s the time to take advantage of cheap living during the summer to pay down those debts.
Take advantage of the tons of fresh produce available at cheap prices right now to make meals at home and save money on food. Keep your windows open and the ceiling fans running instead of blasting the air conditioning. Use your feet or a bicycle to commute to work and get around in order to save money on gas. Little tactics like that can help you make a big payment on that vacation debt, which will save even more money by reducing the interest you pay going forward.
Summertime is a great time for enjoying the great outdoors, traveling a little and spending time with family. It’s also a great time to perform a few little tweaks to get your financial house in order. Take advantage of that opportunity.
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5 Smart Financial Steps to Take During Summer originally appeared on usnews.com
