Give yourself a financial tune-up

As we move through one of the most financially tumultuous years in many decades, some economists feel the worst may be over. But today's continuing high unemployment rates, troubled housing market and tight credit conditions leave many people feeling anxious about the future.

Against that backdrop, this is a good time to examine your current financial state. Ask yourself where you want to be by year's end and how you may need to change course now in order to reach those goals. Here are a few action steps:

Reexamine your budget. A lot could have changed since you last examined your household budget. You may need to tweak your spending and saving habits to get back on track:

• Income: Has your pay increased or decreased significantly? Has overtime income diminished? Has interest income you count on from savings and investments dropped appreciably?
• Basic expenses: Examine how much you pay each month for rent/mortgage, food, insurance, utilities, gas, clothing and other basics compared to six months ago. Have you offset any increases by boosting your income, or do you need to trim a few expenses?
• Debt: Have you taken out new loans or amassed new credit card balances? If you carry forward balances, are you paying more in interest due to rising rates?

If you need a budget refresher course, Visa Inc.'s free personal financial management site, Practical Money Skills for Life, features a step-by-step guide to building a budget, including several interactive calculators (www.practicalmoneyskills.com/budgeting.)

Taxes. Nobody likes overpaying their taxes or underpaying and getting penalized the following April. Ask yourself:

• Did you receive an overly large tax refund or have to pay significantly more than was deducted from your paycheck? If so, you may want to fill out a new W-4 form with your employer and recalculate your withholding allowances.
• Do you expect significantly higher (or lower) deductions this year? (For example, deductible mortgage costs or medical expenses.)
• If you make quarterly tax filings, have you allocated enough to ensure you won't pay a penalty next year?
• Has your home property value dropped significantly in recent years? If so, you may be able to request that your property taxes be reevaluated.
• If you plan to buy a home or new car this year, have you investigated tax credits for which you may be eligible? Go to www.irs.gov and search for "Recovery Act."

Charitable contributions. If you don't have charitable contributions automatically deducted, tally up what you've contributed so far and decide if it's in line with your goal for the year. Don't wait until the expensive month of December to make last-minute contributions.

Reimbursement accounts. If you participate in employer-sponsored health care or dependent care reimbursement accounts, determine whether you're on track to exhaust your account balances. Again, don't wait until year's end to scramble for qualified expenses that will allow you to fully benefit from their tax advantages.

Regardless of whether the worst is behind us or not, it makes sense to get your own financial house in order to weather this economic storm and any future ones.

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