emergency fund

  • September Financial Resolutions

    As summer fades into the distance, September brings with it a sense of renewal and rejuvenation. For many, it’s a time to refocus on their goals, much like the beginning of the year in January. With the start of school families get back into routines which helps people get organized and set goals.

    While you may have set resolutions in January, the start of the year is a tough time to follow through on them because of post-holiday exhaustion, and the temptation make a big change all at once. September represents a clean slate and offers a unique opportunity to revisit and reevaluate your financial progress.

    Here are seven things you can do this September to give your finances a mid-year boost and set yourself up for success through the rest of the year.

    1. Review Your Financial Goals:

    Begin by revisiting the financial goals you set at the beginning of the year. Take a close look at your short-term and long-term objectives. Are they still relevant? Have your circumstances changed? Use this time to adjust and fine-tune your goals to align better with your current situation and aspirations.

    2. Assess Your Budget:

    A budget is your financial roadmap, and September is an ideal time to check if you’re staying on course. Review your income, expenses, and savings contributions. Are you overspending in certain areas? Are there areas where you can cut back? Make necessary adjustments to ensure you’re saving enough to meet your goals.

    3. Emergency Fund Check:

    One of the cornerstones of financial security is having an emergency fund. September is a great time to assess the state of your emergency fund. Aim to have at least three to six months’ worth of living expenses saved. If your fund falls short, prioritize saving to reach this critical milestone.

    Almost as important as having the right amount saved is the account you are saving in. If your emergency fund is in your checking account consider moving it to a high-yield savings account. Most big bank checking and savings accounts pay very little interest (close to zero percent). Today’s rates on HYSAs are close to 5% and you can transfer your emergency fund with just a few clicks.

    4. Investment Portfolio Review and Rebalance:

    Take a close look at your investment portfolio. How have your investments performed so far this year? Are they in line with your risk tolerance and long-term objectives? Index funds that track the overall stock market and bond market are the best long-term investments for most investors. Are your investments doing what they’re supposed to?

    Rebalance your portfolio if necessary to ensure it remains diversified and aligned with your financial goals. Rebalancing usually means selling some of your investments that have done well and buying more of those that have not. It’s best to rebalance on a set schedule. Choose to rebalance once per quarter, or once per year and set a reminder to stick to it.  

    5. Review Your Retirement Account Contributions:

    If you’re not maxing out your contributions to retirement accounts like a 401k or an IRA, September is a good time to increase your contributions. The maximum you can contribute to your 401k/403b for 2023 is $22,500, or $30,000 if you’re 50 or older. The max for your traditional or Roth IRA is $6,500, or $7,500 if you’re 50 or older.

    Increasing your contribution by just 1% each year can really add up. If you’ve received a bonus or a pay raise during the year and your paycheck has increased consider making an even bigger contribution.

    Along with your retirement accounts don’t forget about your HSA. These can also be used as stealth retirement accounts, and maxing out the contributions is a great idea. The contribution limits for HSAs in 2023 are $3,850 for singles and $7,750 for families.

    6. Backdoor Roth IRA Contribution

    If you make too much to contribute to a Roth IRA, consider making a backdoor Roth IRA contribution. The income phaseout for Roth contributions starts at $138k for single filers and $218k for MFJ. Most bonuses and raises are paid by September, so at this point you should have a good sense of your income for the year.

    Unlike the direct contribution to your Roth IRA, you only have until December 31st to make a backdoor Roth IRA contribution. Direct contributions to traditional or Roth IRAs are allowed all the way up to tax-day the next year.

    7. Tax Planning:

    It’s never too early to start thinking about taxes, and there are many decisions you can make in September to put yourself in a more favorable position.

    Now is a good time to review your federal income tax withholding. Withhold too little and you could have a hefty tax bill due next year as well as possible fines for underpayment. Withhold too much and you’re essentially providing Uncle Sam with an interest free loan. Don’t worry, it’s easy to adjust your withholding by filing a new W4 form with your HR department.

    Consider making additional 529 plan contributions. In most states contributions to a 529 plan have to be done before year end, while some states allow you to contribute until tax-day the next year. Many 529 plans offer state tax deductions and the investments grow tax-free.

    If your income for the year has been less than normal, perhaps due to switching jobs or taking time off consider making a Roth IRA conversion. Converting funds from a traditional IRA to a Roth IRA means paying taxes on the conversion now, but prevents you having to pay taxes on withdrawals later. A year with a lower income and lower tax rate is a good opportunity not to be wasted.

    Wrap Up

    September is indeed a month of fresh beginnings, and it’s a perfect time to revisit your financial resolutions, assess your progress, and make necessary adjustments. By taking these proactive steps, you can set yourself up for financial success in the months and years ahead. Remember that financial planning is an ongoing process, and staying proactive will help you achieve your goals and build a secure financial future.


    We are 3 weeks into 2019 and if you set any resolutions for the new year you’ve probably given up or forgotten all about them by now. Don’t feel bad, you’re in the same boat as everyone else. We humans are bad at making and sticking to resolutions, especially if they are non-specific and tied to an arbitrary date like when the Earth completes full revolution around the sun.

    The secret to crafting resolutions that stick is to make them SMART: Specific, Measurable, Action oriented, Realistic, Timely. Most resolutions that fail do in part because they don’t have enough of these attributes. They’re too broad, “what does lose weight or get in shape mean?”. Or they aren’t realistic, “are you really going to run a marathon this year if you haven’t run more than one mile in 2018?”.

    Here I’m going to go through 4 typical failure prone resolutions and how you can structure them SMART-ly to ensure success!

    1. Embark on a no spend January

    This is a popular resolution because we just finished with the holiday season and all of the orgiastic consumer spending that entails. Most of us start January looking at our bank balances and credit card bills thinking that somethings got to change. Going cold turkey by only spending money on the essentials seems like the best bet.

    This resolution is specific and measurable, but it’s not very realistic, one of the hallmark problems of a New Year’s resolution.

    The problem is the binary nature of the resolution. Once you commit to buy nothing other than the essentials, one of two things start to happen. You start to backslide on what you categorize as essential – “Well I really need that double mocha frappe latte because I need the caffeine kick if I’m going to get anything done today” – until you’re back to your old spending patterns. Or the first time you fall off the wagon and buy something you don’t really need, you say “screw it” and give up on the rest of the resolution.

    What you should do instead

    Resolve to use the 48-hour for non-essential purchases and track your subsequent spending. This resolution is still specific and measurable, while also being more realistic and achievable.

    How does it work

    When you think you need to buy something, set a 48-hour timer. After two days, consider the item again and whether you still need it. Often, you’ll find the initial desire to purchase has passed and you find you don’t actually need it. But if you do need it, then you can make your purchase guilt free.

    The second part is to track your spending on these items, especially on things that you purchase while bypassing the 48-hour rule. By tracking what you spend and buy, you can build that into your budget, or set limits to help yourself in the future. Like, no browsing amazon.com after 11pm at night.

    2. Start exercising

    Another all-time favorite resolution. If you do an online search for popular resolutions this one appears on almost every list. After the extra eating and drinking during the holidays, all of us could do with a bit more exercise.

    We start with the best of intentions. The first visit to the gym is great, we feel awesome after spending a half hour on the treadmill and moving some weights around. The next few trips don’t give us quite the same rush, and by the second or third week of January it just feels like too much effort to go to the gym after work.

    This one is action oriented, but not very measurable, or realistic if you don’t happen to enjoy going to the gym or running during the cold winter months.  

    What you should do instead

    Find an active hobby you enjoy and sign up for classes or schedule events at specific times.

    How does it work

    Everyone knows they should get more exercise, but for most people the initial good feelings you get of going to the gym wears off after the first few visits. Rather than spending money on a gym membership that you won’t use, the better bet is to find an active hobby that you enjoy doing instead.

    Even if you spend a bit more money signing up for a weekly tennis or soccer league, you will get more in value than the gym membership you paid for but didn’t use. By signing up for a group class, team event, or scheduling another weekly hobby like a snowshoe outing you add specificity and timeliness to your resolution as well.

    3. Stop eating out as much

    It seems a lot of these resolutions deal with the aftereffects of all the overspending and overeating during the holidays. Or maybe that’s just me?

    On the face of it this is a great resolution for your health and your wallet. Spending less on meals at restaurants leads to a better budget and eating healthier food at home as well. But this also lacks in measurability and realistic aspects. Similar to vowing to “work out more” it’s easy to backslide after a few days or weeks and especially after a long day at work when you’re fridge is out of groceries.

    What you should do instead

    Meal plan at the beginning of each week, but allow yourself two makeup days for when life gets in the way.

    How does it work

    It’s better to allow and budget for one or two meals out per week if you know that by Thursday you get swamped at work and won’t have the energy to make dinner at the end of the day. Resolving to make a plan at the beginning of each week improves the action orientation and giving yourself the option to have a cheat day or two during the week makes it much more realistic that you will stick with it and achieve your goal of reducing the amount of times you go out to eat.

    4. Build up your emergency fund

    Ok, I lied, this is one resolution you should definitely put on your list, but there are ways we can SMARTify it to ensure that we achieve our goal.

    A good emergency fund target to shoot for is having 3-6 months of living expenses on-hand. If you currently have $2,000 and you need to build up another $4,500 to feel comfortable, a good way to structure your resolution is by resolving to put $375 every month into your emergency savings account. An even better way is to do this automatically by setting up a monthly auto deposit into your account. This resolution is specific, measurable, action oriented, realistic and timely. Boom! Nailed it.

    If you’re looking at your finances and thinking you should have structured some 2019 resolutions around making a budget, paying off debt or organizing your bank accounts give us a shout. We’re happy to talk and the first meeting is always free!

    Here’s to a year of growth, health and adventure!