6 Tips to Empower Your Summer Finances

by | Jun 27, 2022

Woohoo, it’s officially summer!!! Summertime is when most people I know tend to travel more, get together with friends, play, and do many other things they typically don’t do throughout the year. Which also usually means not spending the time we should on our finances, despite it being an important time to do so. Hopefully, the tips below can help you take advantage of the summer months and save more, spend wisely, and keep the momentum going for the rest of the year!

  1. Keep track of your spending and prepare for big expenses.

    Summer is the time for barbeques, weddings, family gatherings, days at the beach, picnics, and a whole bunch of other fun activities. It is easy for you to quickly ramp up your expenses as you are buying food, gas, a new swimsuit, and everything else. The single most important thing you can do to keep your spending in check is to track of your spending. I highly recommend using apps like Mint (free) or Monarch (free version available) to track your spending and help you plan ahead of time for your fun events. You can also keep watch throughout the month to see where and how you are spending and can make any necessary adjustments proactively.

  2. Hire your tax professional.

    Take the time to organize and prepare your financial life for smooth sailing for the rest of the year. Do you have a tax professional you enjoy working with? Now is the time to get one! Most tax professionals book up before year-end for tax preparation services for the following year. These professionals are at their busiest at the end and the beginning of the year, so you may miss out if you don’t commit to one now. Waiting until the last minute to hire one may mean you risk missing any end of year tax planning opportunities, which could result in a higher tax bill.

  3. Rebalancing and tax-loss harvesting.

    You should be looking at your investment accounts quarterly to rebalance your portfolio so that you don’t become too heavily weighted in one asset class as the markets fluctuate. If you have taxable investment accounts, you will also want to identify any opportunities to sell some investments at a loss (tax loss harvesting) to help offset gains in your portfolio for this tax year. This is especially beneficial if you can re-allocate those funds to investments that are more aligned with your goals. 

  4. Sell the clutter and make some money.

    Have a yard sale to get rid of the items in your house that are taking up space, not being used, and draining your energy. Plus, you can use the money you earned to help with your summer budget or start saving! Facebook marketplace, EBay, Letgo, and Poshmark can all be used if you don’t want to clutter up your lawn too! Be safe and take precaution when buying and selling used stuff online. Read this article to avoid any scams or fraud when dealing with any transactions online. 

  5. Make your quarterly estimated tax payments.

    If you are self-employed and not making regular tax payments from your paychecks, then chat with your accountant on how much you might owe. If you don’t pay enough taxes through withholdings or estimated tax payments, you may be charged a penalty. You need to make these estimated quarterly payments if you are expecting to owe at least $1,000 of taxes when your return is filed. Check with your accountant or Financial Planner if this applies to you or you can read more information on this here and check out this flowchart to see if you need to be making these estimated quarterly payments.

  6. Check on and increase your savings rates.

    If you haven’t contributed much to your retirement accounts yet this year, now is the time to get started or increase your savings! Most retirement accounts have a limit on how much you can save within a year and if you wait until the last minute to take advantage of these accounts, you risk not having enough cash flow and miss out on these hugely beneficial contributions. For Roth IRA contributions, there are income phaseouts, meaning if you make more than a certain amount you are unable to contribute to a Roth IRA (also note if you file married filing separate, this phaseout is decreased to $10k). If you are keeping cash on the side, check out Ally’s online savings account which is currently paying 1% as of 6/27/22.

I know that dealing with your finances is not on the top of anyone’s list while the sun is shining and you just want to be outside. However, setting aside some time to tackle this list will set you up for success for the rest of the year!