Are you on the road to financial freedom or do you need to make a U-turn? Regardless of your financial situation, October is a great time to take a look at your personal financial situation and make adjustments. Why now, you ask? If you move fast, you will probably be able to make adjustments before the end of the year, possibly taking advantage of any tax-saving strategies.
Here’s six tips on how to give yourself a financial checkup today:
This is the first step in your personal journey to financial well-being. Review your current budget and make sure it still makes sense. Have you taken into account all of the upcoming expenses for the new school year? Winter vacation? Holiday shopping, etc.? If you’re nodding your head “No,” it’s probably best that you whip out a paper and pen and account for all of your needs, wants and desires. You can download a budget worksheet on page 4 of Prosper’s literacy guide, Dollars & Sense.
If you haven’t recently snagged a copy of your credit report, now is a good time to get one. Review your report annually to ensure there are no errors or fraudulent accounts.
Knowing and monitoring your credit score on a regular basis is also a good practice to adopt. Personal finance apps like Prosper Daily, give consumers free access to their credit score monthly.
One way to get on top of your finances is to control your spending and pay down your debt. Sites like Credit.com have calculators that can help you figure out your debt-to-income ratio.
After doing the math, if you still find that you’re struggling with debt and to get on a new path, you might want to to consult a financial expert for advice or consolidate your debt through taking out a personal loan.
Take a look at your paycheck and recalibrate your withholding amounts accordingly. You might be earning more or less than expected and may want to adjust your W-9 form.
Another thing to check is your insurance coverage. While you probably have enough, make sure you’re taking into consideration any upcoming life changes or new phases like family planning.
Make sure your portfolio is diversified for long-term success. Many financial experts say as you get older, it’s wise to move your investments so that a higher percentage of your money is invested in less volatile vehicles like bonds instead of stocks.Moreover, in addition to the stock market and alternative investment vehicles like Prosper, you might want to make sure you’re personally investing in your future by creating or adding to your 401(k) or retirement savings plan. Last year, the I.R.S. made it easier to convert after-tax contributions directly to a ROTH I.R.A. when you retire or leave your company.