Halftime Plan: 2008 Mid Year Review

With half the year in the books, now is the time to check the status of your 2008 financial plan.

Hopefully, you took our advice and got a plan in place to make your 2008 better than your 2007.

Like any blue print to success, there are always going to be revisions.

Your personal budget and financial plan are no different.

Never fret, YBP’s. We’ve got some good milestones to use measure where you’re at and goals to set you up for the rest of the year.

Let’s recap the 1st half of your 2008:

• You should be halfway to your annual savings goal. No excuse on this practice. Money in the bank saves your assets. If you would have committed to saving $75/mo, you would have an emergency fund balance of $450. Not bad for half the year.
• I know times are tough, but hopefully you’ve increased your retirement contributions. Emotions tell you to draw back when the market is taking a beating, but the objective for investing is to buy low and sell high, that’s where you’ll see your gains.
• Make debt reduction your primary concern. We suggest that you pay extra to the principle on your mortgage loans to reduce your outstanding balances. If you have auto loans or other credit card balances out there, make sure that you pay those off prior to paying extra principle on the home.
• As I said before, now is absolutely the best time to invest in mutual funds, stocks and other marketable securities. Dollar cost averaging is in your best interest and while timing the market is impossible, the basic strategy is to buy low and sell high.
• I told you to stop being like the Jones’ and I hope you listened. The mortgages, credit cards, SUV’s and finance charges have finally caught up with them. Now they’re at the cross roads of bankruptcy and foreclosure.

Here are a few tips to help you weather the financial storm of this economic downturn while accomplishing your financial goals:

1. Reduce and/or eliminate your discretionary spending. Now is the time to flip Starbucks the bird and start making your own coffee. Most people would be surprised by how much they spend on negligible items like eating out, coffee, shopping, and even dry cleaning.
2. Don’t get caught with your pants down. Keep your resume updated because companies are cutting jobs left and right. You don’t want to be on the outside looking in. Recessions are the worst job hunting markets, so if you feel like you may be getting the axe, get out there and start searching now.
3. Treat credit card debt like the West Nile Virus. I suggest you avoid it at all costs. Not that there’s ever a good time to take on credit card debt, but if there was, this isn’t it. Don’t fall into the trap of thinking that you can borrow it now and repay it when things get better. The fact of the matter is, no one knows when market conditions will change for the better, and if you need to borrow money to buy it, then you probably don’t really need it.
4. Re-examine your expenses. This applies to expenses such as home and auto insurance, utilities, cable television, cell phone plans, etc. With the exception of home and auto insurance, most of these expenses can be trimmed or even cut. By cutting out your cable television, you could save an average of $625 per year. Check to see if your utility company offers a level payment option, or if they will give you a discount for using energy efficient appliances. Also, don’t be scared to shop your car insurance for a cheaper deal.
5. Consider public transportation. If taking public transportation is an option, you need to do it. Not only will it save you money, but it will cut down on the wear and tear on your vehicle and nerves. Contact the human resources department of your employer and see if they subsidize your fees for public transportation.

For more info check us out at www.molifeney.com