Cash-Flow Mid Year Check-Up

Earlier this year I shared a post about What is Cash-Flow and Why Should I Care? Part I. It covered several important choices that you need to consider about your income and liabilities. Liabilities is just a fancy word for saying that you are legally obligated to pay another person or entity.

It’s an interesting thing, really. As soon as you are born you become part of an ecosystem where we all depend on each other in some way. From a financial standpoint you first begin to feel the impact with that first paycheck, tax season or major purchase. In order to participate in financial transactions, there are fees and taxes associated with those. Since they aren’t always made clear during a transaction, the responsibility falls on you to learn the ropes.

This time of the year is a great time to do a quick financial checkup. Putting what I wrote about yesterday into practice, let’s Track – Measure – Adjust – Repeat.  Here are the key areas you’ll want to measure and adjust as needed:

• Income – do you have enough to cover your expenses, protection and savings plans?
• Taxes – are you withholding enough and/or are you setting aside funds to pay them later?
• Insurance – do a quick rate check, look for the best protection at the best price and increase those deductibles as you continue to build your emergency funds (keep more of your money to use as needed)
• Expenses – compare rates, plans, subscriptions and eliminate what you don’t use or need (everyone wants a piece of your cash – guard it well)
• Savings – are you on track with your Emergency Fund, Fun Money Fund, Travel Fund, Health Savings and Retirement Savings? The more you save, the higher the deductibles you can handle. The more you put into 401k’s, IRA’s and Health Savings Accounts – the lower your income tax burden. Yay!
• Stuff – what can you sell, donate, repair or refurbish? Make sure your stuff is properly protected with rent/homeowner’s insurance and/or personal articles policies.
• Giving – put your money where your heart is, by giving a little back as you are able, towards a project or cause that you love.

Perhaps you can do work on one key area each week and by the end of June you will be feeling more informed and empowered with your finances. Make adjustments as needed. Life changes on an ongoing basis, so don’t put your finances on automatic and assume everything will be just fine.

What area would you like more information about? Which one do you feel best about? My mission is to help you find your financial zen and live life to the fullest.