Money Matters

June / July, 2010

Spruce Up Your Finances for Summer

Ahhh, summer-time for BBQs, baseball and beautifying your home and garden. While I love planting pretty flowers as much as the next person, I dread the mess and expense of big home and garden renovation schemes.

By Kristi Sullivan

Here is a more appealing set of summer activities:

Pruning your investments

Just because something was a great quality investment when you bought it, doesn't mean it always will be. Changes in management, disappointing returns, or higher risk can be reasons to ditch old investments and look for replacements.

Planting new investments

• Now is a great time to revisit your savings rate.
• Are you putting in the correct percentage to your 401(k) plan to take advantage of current maximum contributions ($16,500 for 2010)?
• Did you cancel HBO last year to save money? Get a child out of diapers? Use automatic transfer at the bank to move that extra $30 a month from checking to savings.
• Have you recently paid down credit card debt? Re-route those payments to college, retirement or emergency savings.
• Tax Refunds: do you really need another TV? How about a Roth IRA contribution instead?

Invite a new friend to the investment party. This column does not offer personal investment advice, but here are a few investment categories many people lack. Discuss with your financial advisor if these areas might benefit your portfolio:

• Emerging markets stock funds - These are seen as attractive because many emerging markets don't have the high government debt of developed economies due to the recession.
• Emerging markets bond funds - These also are attractive, for the same reasons cited above. In the last few years, these have been less risky than some domestic bond funds. This is not a guarantee of future performance.
• Socially responsible funds - Due to their emphasis on investing in sustainable business models, these funds proved very resilient during the recession.

Join me in shunning home improvement in favor of financial improvement. Enjoying a strong financial foundation is much more comforting than an expensive new back deck.

Kristi Sullivan is the founder of Sullivan Financial Planning, LLC, a Registered Investment Advisory Firm. She holds the Certified Financial Planner™ designation, Colorado Life and Health Insurance License, and NASD Series 65 license. She's been helping individuals and families plan for their futures for 13 years. Reach her at 303-324-0014 or kristi@sullivanfinancialplanning.com.