By: Charlestien Harris
Whether you’re returning to the classroom or the office, September is all about getting back to work. It’s an excellent month to refocus on your finances before the busy holiday travel and shopping season kicks in. There might be several items demanding your attention, and a quick review of your finances can empower you to make necessary adjustments and maintain financial stability.
With summer coming to an end and the school year beginning, September often feels like a fresh start for many of us. This makes it an ideal time to reevaluate and recommit to any financial goals that may have fallen by the wayside. The following suggestions are worth considering to keep your finances robust well into the future:
- Review Your Workplace Benefits: September marks a favorable time to assess your workplace benefits ahead of open enrollment. You may have experienced changes such as marriage, divorce, the birth of a child, or the passing of a spouse. These changes might necessitate updating beneficiaries. Reviewing your benefits package is crucial, as you often have a limited window for making changes. Ensure your records accurately reflect your financial situation.
- Evaluate Your Home Insurance Policy: Home insurance covers the cost of rebuilding your house in the event of a disaster. If you’ve undertaken significant home renovations, the cost of rebuilding might be higher. Experts recommend adjusting your coverage levels to account for the home’s value with the new improvements. Reviewing your policy allows you to assess your current needs and make necessary adjustments. Check your coverage amount and assess its adequacy based on your current situation. Life changes often prompt beneficiary updates, so be sure to keep these up to date.
- Review and Settle Quarterly Taxes: Freelancers, gig workers, contractors, and the self-employed should note another tax deadline this month. Estimated taxes for the past three months are due on September 15. If you’re new to freelance or gig work, remember that these taxes are still applicable. You’re required to pay taxes as you earn throughout the year, either through paycheck withholding or estimated tax payments. Since these jobs don’t involve tax withholding from wages, you need to make quarterly payments to the IRS. Failure to pay sufficient tax by each payment deadline might result in a penalty, even if you’re entitled to a refund when you file your annual income tax return.
- Review Your Advance-Planning Documents: While it’s not a cheerful topic, having a will and other end-of-life documents is crucial. Four “must-have” documents should be in place to prepare your family for the challenges ahead in case of unexpected events. A will specifies where your assets go upon your passing, but you also need a revocable trust with an incapacity clause (appointing someone to handle certain assets if you’re incapacitated), an advance directive (outlining your emergency medical care preferences), a durable power of attorney for health care (naming a trusted person for medical decisions), and a durable financial power of attorney (appointing someone for financial decisions). Once you’ve established these documents, convene a family meeting to inform loved ones of your plans.
Achieving financial fitness may entail tough decisions, but staying proactive can help you stay aligned with the goals you set at the beginning of the year. Reviewing your financial documents provides valuable insight into managing the current and future financial needs of your family or yourself.
For more information about this and other financial topics, please feel free to contact me at Charlestien.Harris@banksouthern.com or call me at 662-624-5776.
Until next week – stay financially fit!