It’s hard to focus on your finances during the summer, which is why I prefer to keep things simple. Before you check out for a vacation, start streamlining your financial life: Set up direct deposit, if you haven't done so already, and automate recurring bills to reduce the chance of incurring late-payment fees while you're out of town.
Whittle down your credit cards, too: Pick the two that offer the best benefit, and use only those. (Don’t close the other accounts, because doing so could negatively impact your credit score -- just park the cards securely in a drawer at home.)
You can put your savings and investing plans on autopilot, too. If you’re putting away $50 a month, bump it to $60 to get an automatic 20% increase.
While you're already in simplification mode, consolidate your accounts. This has a few benefits: It can help you avoid fees and get better deals, but it also makes it easier to monitor your entire holdings to make sure your money is properly diversified. Resist the urge to tinker with your investments by creating an asset allocation plan that you can stick with; then choose auto-rebalancing so you don’t have to worry about it if markets move while you're checked out.
Finally, if you are feeling a bit more ambitious and want to simplify your insurance coverage, you can make a few easy fixes:
- Auto: If you have an old car worth under $5,000, eliminate collision and comprehensive coverage and increase your deductible.
- Liability: Check to see if you can earn discounts by purchasing car, homeowner’s and umbrella liability insurance coverage from one company.
- Private mortgage insurance (PMI): You may be able to drop this coverage altogether if, with home prices rising, you have at least 20% equity in your home.
- Life: Needs often decline as you age, so you may be able to get rid of an old policy or consider replacing an expensive policy with a cheaper term policy.