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8 Step Summer Financial Checkup


About the author: Lamar Watson, CFP®, is a Fee-Only Financial Advisor in the Washington, D.C. area that works with clients virtually across the country. Lamar's work with his clients starts with a focus on budgeting, insurance, optimizing employee benefits, investing, and retirement planning. Dream Financial Planning is a Fiduciary Financial Planning firm specifically designed to help individuals in their 30s and 40s take control of their finances and fulfill their dreams. Feel free to schedule a complimentary consultation to learn how we use the DREAM Financial Planning Process ™ to help our clients achieve their goals. 


It seems like when summertime hits, time slows down. Warm weather is here, your taxes are complete, and the vacation days are scheduled. If you find yourself with a bit of extra time on your hands in the upcoming months, you may want to use this opportunity to check in on your family's finances. While doing a thorough analysis of your wealth may sound intimidating, we've broken it down into eight simple steps to keep you focused and on track.

Back in April, I spoke with CNN to share my thoughts on budgeting, Crypto, and NFTs, in the article 5 savings mistakes people make when building their financial life.

What Issues Should I Consider When Reviewing Cash Flow 2022?

To help you guide you toward creating and managing a cash flow plan that supports your lifestyle and goals, we have created the checklist above. It covers cash flow planning basics, including:

  • Income sources
  • Essential and discretionary spending
  • Debt and taxes
  • Goal funding
  • Monitoring strategies

Step 1: Analyze Your Budget

In early 2022, the Bureau of Economic Analysis reported that the personal savings rate is at only 6 percent.1 An effective way to avoid spending more than you're earning is to step back and take stock of your monthly and annual budget. And if you don't have a budget at all, use this time to make one. If you work with a Financial Planner, they should be able to tell you how much you need to save to reach your goals. The long-term goal that most clients focus on is retirement. Other short and intermediate-term goals could include saving to buy your first home, new car, or starting a family. If you're not working with a Financial Planner, a good rule of thumb is to save at least 15% of your income. 

Many credit cards or banks will offer categorical breakdowns of your spending, which can be a great way to find out what you're spending the most money on and if there's room to cut back. To get the best look at your spending habits, you may want to evaluate your savings and spending record over the past six to 12 months.

Perhaps your:

  • Income streams have changed, which can affect your debt and taxes.
  • Essential and discretionary spending has experienced some creep, which can affect your debt and even goal funding.
  • Savings goals have changed, which can affect your discretionary spending.

Sometimes it's easy to spot when your cash flow gets a little out of balance. Sometimes you may not realize it until it's too late. Take a few moments to go through the downloadable checklist below. It covers several areas that can help shed light on possible planning issues to consider. 

What Issues Should I Consider When Reviewing Cash Flow 2022?

The health of every financial plan depends heavily on sound cash flow planning. Creating a cash flow plan is likely a preliminary exercise conducted at the outset of your Financial Planning journey. Most people tend to know what they should do, but in reality, they often fall short of taking even the most basic steps toward tracking and managing their cash flow. You can have a dramatic long-term impact on your financial well-being by simply increasing your awareness of your spending and following a plan

Step 2: Seek Out Tax Savings

Do you scramble to pull your paperwork together every March and April? This year, try taking a different approach to tax season by evaluating your tax-saving strategies early. You may want to work with your financial planner or tax professional to create a mock tax return, as this can help you understand your withholding options and tax-saving opportunities such as 401(k) or 403(b) options, IRAs, and HSA contributions.

Focus on filing any time-sensitive deductions and brush up on changes in tax laws. Reaching out to your tax professional now could mean you have more time to prepare and strategize together for next year's returns.

Step 3: Tackle Your Debt

An alarming 38 percent of adults carry credit card debt from month to month.2 If you're guilty of putting off managing your amounting expenses, now's the time to start planning to pay them off. While most consumers have some amount of good debt on their plate (mortgages, car payments, etc.), it's the bad debt (credit card debt, student loans, etc.) that you'll likely want to focus on managing and eliminating.

While you could be tempted to simply pay off what shows up on the bills each month, you may want to create a debt summary to get a better idea of your total debt's big picture. By creating an annual debt summary, you and your financial advisor can better understand whether you're gradually working down the amount or falling farther into the hole.

Step 4: Revisit Short and Long-Term Goals

A lot can change in a year - marriage, death, divorce, growing your family, and experiencing a major career change. Even seemingly small adjustments, like a job promotion or sending a kid off to college, can have a significant impact on your financial status. That's why it's important to regularly review your long-term goals and progress towards them while revisiting and evaluating your shorter-term goals as well. 

Step 5: Evaluate Coverage and Providers

As you're reviewing your budget and expenses, take the extra time to thoroughly evaluate your current providers and coverage options. This includes your internet, cable, and wireless service providers in addition to your insurance coverage options. If you tend to set up auto payments and forget about your monthly bills, this could be an opportune time to revisit what it is you're actually paying for.  

Step 6: Reassess and Rebalance Your Portfolio

It's important to visit your portfolio and risk tolerance regularly to help keep it in line with your tolerance, goals and market conditions. While most managed portfolios will be rebalanced automatically, it's important to take stock of your investments' big picture. Doing so can help you determine if you need to diversify differently or reassess your risk tolerance.

Step 7: Review Your Retirement Savings

Whether retirement is decades down the line or within the upcoming year, reviewing your retirement savings on an annual basis is a great habit to start. Take the time to assess whether or not you're maxing out your retirement contribution options and how the savings you're making today will translate into retirement income later down the line.

Step 8: Assess Your Estate Plan

It's not fun to plan for the worst-case scenario, but leaving your family with an outdated will, trust, or estate plan can lead to some major issues down the line. As you assess your legacy plan annually, make sure you're accounting for any newly acquired assets (houses, cars, pets, etc.) while checking that your designated beneficiaries are still willing and able to assist in the event of your passing.

While you're likely daydreaming of book reading, beach-going, and backyard barbecuing this summer, don't forget to do yourself a favor and squeeze in some financial assessment as well. 

Dream Financial Planning Process ™

Whether you're managing student loan debt, starting a family, or considering buying your first home, the DREAM Financial Planning Process™ is tailored to the unique needs of busy professionals in their 30s and 40s. This process focuses more on short-term goals while you grow and evolve in your personal and professional life. So if you're looking for guidance on Financial Planning, optimizing employee benefits, budgeting, student loans, and managing your 401k or investments, we can help.

Complimentary Consultation

With uncertainty surrounding the economic stability of our country, it's okay to have fears and anxieties surrounding your own savings and investments. The most productive course of action from here is to reach out to Dream Financial Planning (or whoever your trusted advisor might be) and discuss your options. It's easy to have knee-jerk reactions when it feels like the bottom is falling out, but it is imperative to make decisions using research-backed data and a level head. If you'd like a Complimentary Review and risk assessment of your investment portfolio, feel free to send me an e-mail.

Monthly Newsletter

In the June Newsletter, I provide a market update and a PDF guide with tips to help you handle inflation. I also shared a CNN article where I shared my thoughts on Crypto and NFTs, 5 savings mistakes people make when building their financial life. If you find any of this information helpful, feel free to sign up to receive future e-mail updates. If you find any of this information helpful, feel free to sign up to receive future newsletters via e-mail.

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  1. https://www.bea.gov/data/income-saving/personal-saving-rate
  2. https://www.nfcc.org/resources/client-impact-and-research/2021-consumer-financial-literacy-and-preparedness-survey/
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