7 Steps for Your Fall Financial Checkup

Thanks to summer vacations, weddings and outdoor barbecues, it’s easy to take on unexpected debt from June through August. In fact, a May survey by Capital One found that 87 percent of Americans say they spend more money on socializing during the summer months than any other time.

“It is easy for people to enjoy themselves and lose track of spending in the summer, which can quickly be compounded by the holiday spending surge that follows shortly after,” says Tad Herrington, senior financial planner at John E. Sestina and Company, a fee-only financial planning firm in Columbus, Ohio, and co-host on the weekly radio show, “Managing to be Wealthy with John Sestina.”

With that in mind, as fall approaches it’s an ideal time to give your finances a checkup and get your budget back on track ahead of the holidays. Follow these tips to spruce up your finances.

[See: 8 Big Budgeting Blunders — and How to Fix Them.]

Plug budget leaks. Leslie Tayne, debt resolution attorney and managing director of Tayne Law Group, suggests making a detailed list of your net income and expenditures to identify areas where you can cut back. “You have the most control over your discretionary expenses as they are lifestyle choices,” Tayne says. “For example, many people are surprised at how much they spend each week on coffee and lunch. Look at your wants versus needs and adjust your spending habits.”

Meanwhile, Nicholas Fiorentino, CEO of CrediReady, a San Diego-based financial services company, says there are plenty of opportunities to avoid wasteful spending when you’re feeling bored. “Do something [for] free such as take a hike, wash the car or go to the dog park,” he says.

Consolidate summer debt. If you’re having trouble paying off your credit card debt, refrain from using your card until you get control and stick to cash. Then, make a strategic repayment plan.

Jennifer McDermott, a consumer advocate for the personal finance comparison website finder.com, suggests transferring a high-interest credit card balance to one that offers a zero percent introductory APR. This strategy can save you hundreds of dollars on interest and help you pay down debt faster, she says. However, it’s important to pay down the balance in full before that introductory period is up in order to benefit from the savings.

Create a mock tax return. Amit Chopra, certified financial planner and managing partner at the financial planning firm Forefront Wealth Planning and Asset Management in New York City, advises his clients to create a mock tax return during the fall. “It gives you a good idea of where you stand with taxes paid, allowing you to adjust your withholdings accordingly if necessary. It also draws attention to underfunded employer-sponsored retirement accounts like 401(k)s and 403(b)s,” he says.

This is a good time to boost contributions by 1 or 2 percent, which will help lower your taxable income and help you reach your retirement goals, Chopra advises.

Check your credit report. Consumers often neglect to monitor their financial accounts over the summer. It’s a wise idea to review your credit report following the peak travel season. “You want to check your credit to make sure all the accounts belong to you and are reported correctly,” says Jeanne Kelly, a credit coach and author of “The 90-Day Credit Challenge: Playing the Game of Credit Scoring — Know the Rules to Win!”

Kelly suggests requesting a free copy of your credit report at AnnualCreditReport.com and calling the specific credit-reporting bureau that lists any incorrect information to make a dispute. If you suspect fraud or identity theft, consider freezing your credit account to stop a thief from opening an account or getting credit.

[See: 10 Big Ways to Boost Your Budget — Without Skimping on Your Daily Latte.]

Compare service providers. From insurance plans to credit cards to internet providers and cellphone packages, consumers often sign up and stay with the one provider without ensuring the plan best fits their budget and needs, McDermott says. Taking a few moments to compare competitor offers can translate to hundreds of dollars in savings.

For instance, Nathan Barber, an insurance expert at QuoteWizard, a site that helps people save money by comparing insurance rates, says that prices are constantly changing in the insurance market and it’s important to compare rates to get the best bang for your buck.

“Insurance companies buy shopping habit data and will incrementally increase your rate every year to charge you what they think you are willing to pay,” Barber says. “You can also change your coverage options, such as increasing your deductible, which will lower your monthly premium cost.”

Meanwhile, Erin Lowry, author of “Broke Millennial: Stop Scraping By and Get Your Financial Life Together,” suggests reevaluating all your financial products. “What’s the interest rate on your savings account? Does your credit card have an annual fee? If so, are you getting value for the cost? Are you getting charged a fee each month for your checking account? Start comparison shopping and see if there are other financial products that would be better suited for you,” she says.

Prepare for open enrollment. Open enrollment for health care happens every year in the fall. Whether you’re enrolling in Medicare, health insurance as a self-employed individual or an employer-sponsored plan, give yourself plenty of time to gather information and review your options to find one that meets both your health and financial needs, says Richard Reyes, certified financial planner known as the The Financial Quarterback and president of Wealth & Business Planning Group, LLC in Maitland, Florida. Keep in mind, any adjustments you make could have an impact on your take-home pay and this is the only time of year you can make an adjustment to your coverage options. This is especially important if you experienced any change to a life circumstance, such as getting married or divorced or having a baby, as this will likely effect your health care needs, Herrington adds.

Don’t forget to review any flexible spending account balance and make sure to spend those funds by the end of the year, Herrington advises. If you have excess funds in this account, consider reducing your contribution for the upcoming year.

Set your holiday budget. If you’re planning to pay for gifts, travel and other holiday expenses with your final paycheck of the year, you may put unnecessary strain on your finances and increase the likelihood of taking on more debt come December.

“The easiest way to budget for the holidays is to plan ahead and make a list of all the events you plan to buy for such as parties, family dinners and gift exchanges,” says Megan Robinson, financial coach and writer at DollarSprout.com, a site that provides financial information to help consumers make smarter decisions with their money. “Create an itemized list for each event, including food, gifts, decorations and anything else you may need. Then, set a limit for each gift and category on your list. Add up each category for your total budget, then set a goal date and start saving.”

[See: 12 Ways to Be a More Mindful Spender.]

Lowry also suggests getting a jump-start on holiday travel planning as soon as possible. “Start buying tickets for holiday travel now. The longer you wait, the more expensive it will get,” she says. You can begin tracking flight prices through sites such as Hopper, an airfare price comparison and tracking site, so you know when to book for the best value.

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7 Steps for Your Fall Financial Checkup originally appeared on usnews.com



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