6 Financial Tips for Third Quarter 2020
To say 2020 has been an eventful year is an understatement.
While the economic situation is uncertain, there is a silver lining in all of this: it is forcing many Americans to rethink how they manage their finances.
Whatever your current employment and financial situation, there are actions you can do today that may protect what you have and prevent future financial troubles.
Keep reading for 6 financial tips for the third quarter.
#1 Review Your Year-to-Date Progress and Adjust Accordingly
It’s time to sit down and assess what you’ve financially accomplished year-to-date and where you are in achieving your objectives for the year.
Take note of what you still need to accomplish in the third quarter to stay on track.
Spending time now to assess your situation–without judgement–helps you know exactly where you are and what you need to do to course correct.
If you’re way off the mark with your 2020 financial goals, don’t sweat it (after all, we are living in strange times folks!).
If you’re too far behind, you may need to revise your goals and create a new plan for the rest of the year.
This is also a good time to re-evaluate your spending habits and household expenses.
Many Americans aren’t driving as much, going out to eat, or spending like we used to.
Review your spending over the last few months and see where you may have extra money to save more or pay down debt.
[Related: Pay Off Debt or Save for Retirement. Which Comes First?]
#2 Save More
According to data from the Federal Reserve Bank of St. Louis, Americans are saving more…despite everything that has happened in the last few months.
The amount of money in savings deposit accounts increased by 2.7% from February to March, and increased 4.4% from March to April.¹
During the same period in 2019, savings increased less than 1% month-over-month.
If you’ve been saving the past few months, see if you can’t free up more money to stash away for a rainy day.
Even contributing an additional $50 each month adds up over time.
If you haven’t been saving, see what you can’t cut from your expenses and divert that money into a high-yield savings account.
With so much uncertainty in our lives, having a savings cushion will help decrease stress and ensure you can cover whatever life throws at you in the future.
If you’re planning on receiving a tax refund this year (and, like many Americans, you’re still waiting to get it), consider putting that money in your savings or retirement accounts.
[Related:One Simple Way to Boost Retirement Savings without Contributing More]
#3 Rebalance Your 401(k)
This financial tip for the third quarter doesn’t require you to contribute more of your paycheck and may help you earn and keep more of your 401(k) investment.
If you aren’t rebalancing your account allocations, you may be missing out on earning more and keeping more of your hard-earned retirement savings.
Because unmanaged allocations may experience much larger losses in down markets and may miss the opportunity for growth during good markets.
We recommend rebalancing your account allocations every quarter, or four times a year.
This way, you can make the appropriate changes in order to stay on course with your savings goals.
[Want to maximize your 401(k) and keep more of your hard-earned money? Check out our no-cost guide 5 Mistakes You Want to Avoid with Your 401(k) .]
#4 Get Your Taxes Done, If You Haven’t Already
If you haven’t filed your taxes yet, you have a few weeks left until the extended deadline on July 15, 2020.
Back in March, the IRS pushed back the tax deadline for individuals and businesses from April 15, 2020, to July 15, 2020 without penalties and interest, and regardless of the amount owed.
The deadline to file extended returns remains unchanged. Extended returns are due by Oct. 15, 2020.
[Related: A Good Way To Spend Tax Refunds Wisely]
#5 Review Your Credit Reports
There’s no time like the present to review your credit reports and ensure nothing is showing up that’s not yours.
Data breaches occur all the time, so we recommend you regularly check your credit reports, credit card statements, and bank accounts.
Better yet, find an inexpensive identity theft monitoring service to notify you when your information has been compromised.
#6 Get Professional Help
This final personal finance tip for third quarter may make a significant impact on your overall financial health and your retirement savings.
Much like athletes have coaches, informed investors understand the importance of third-party help in navigating their journey to retirement and financial independence.
It doesn’t matter how much money you have saved, how much debt you have, or how far away from or close to retirement you are.
Speaking to a third-party expert now can help you get on track and stay on track with your financial goals.
When selecting a professional advisor, it’s important to work with an advisor who has a fiduciary duty to you.
A fiduciary is legally obligated to put your needs above his/her own and act in your best interest–ahead of any brokerage firm, investment provider, or company-provided representative.
Check out our no-cost guide on The Different Types of Licenses Financial Advisors Have and What They Mean to You
Sources:
