Here we are right in the middle of the dog days of summer. The weather’s hot, and the pace of life slows. The vision of a rocking chair and cold iced tea comes to mind. While we sit back and breathe a sigh of contemplative relaxation, we also need to be aware. We need to be aware that we are half way through 2011. I know it’s hard to believe, but the next thing you know we’ll be counting down and watching the crystal ball drop in Times Square.
As we stare down mid-year, we should ask ourselves a few questions in regards to our year. How are we doing? Here are five questions you should consider:
1. If the second half of 2011 looks just like the first, will it be a successful year?
This is great question because it addresses the big picture. While the financial aspect of 2011 is important, there are other areas that probably need assessing as well…..health, work-life balance, golf game…..etc. I would suggest an honest evaluation of the question and develop a plan for the second half of the year.
2. Are you contributing at least 10% to your 401k/403b or other retirement plans?
This question is obviously financial in nature and focuses on the importance of saving for tomorrow. It also brings with it tax benefits. Remember that many retirement contributions are pre-tax and will save tax dollars today. Contributions to ROTH and non-deductible IRAs are a couple examples of plan contributions that do not save current tax dollars.
3. What is your tax picture for 2011?
If you have not completed a tax projection for 2011, it’s a good time to do so. There is plenty of time left to make changes to your withholding rate or quarterly payments to positively impact your financial year. Tax planning is one of the most important aspects of financial planning and should be used to create maximum financial traction. Whether you are reducing the check you will have to write next spring or withholding less each pay period, it’s important to use tax planning to increase financial efficiency.
4. Are you utilizing your 2% raise?
Remember the social security withholding rate has been reduced by 2% for 2011, essentially creating your 2% raise. This equates to more money in your pocket, and it’s important to use this “raise” wisely. If you simply get used to the extra money now, January of 2012 could be a shock as the withholding rates return to normal. This means your take home pay will decrease. A great solution is simply increase your 401k/403b contribution by 2%….knocking out two questions from this list!
5. Are you following the Five Fundamentals of Financial Success?
I can’t state enough how important it is to follow these five financial tenets. Simple as they may seem, the financial results are overwhelmingly positive. If you find yourself lacking in one of the five areas, there is still time left to turns things around for 2011.
These five questions are a great way to help you out of the financial doldrums of summer. Get out of the rocking chair and do something positive for yourself and your family. You’ll feel much better about your accomplishments, allowing you to enjoy you next summer siesta without guilt!
Are there any questions you feel are appropriate for this list? If so, I would love to hear them.