Here it is, June 2014, the middle of the year. So, what do things look like for your personal finances in 2014 at the half-way point? Let’s jump right in and find out.
2014 Taxes
You’re going to pay taxes in 2014, and in every year until you die. Right now, is a good time to handle a few tax issues before the second half of 2014 gets rolling.
First, use the IRS withholding calculator to see if your tax withholdings are set properly. Grab a paystub and enter your information for so far this year. Add in a best guess of your various income tax deductions, or use last year’s tax forms to make estimates. Of course, if you prefer, you can use the 2014 standard tax deduction rate as well. Either way, if you are way off on your withholdings (you’ll owe a fortune, or get a fortune back as a refund), it’s time to submit a new W4 form to your employer. Grab your nearest HR person and ask for one, or just get one from the IRS website and turn it in. You only need the bottom part and filling in the worksheet is not necessary, especially if the calculator just told you what numbers you need.
Of course, if you are self-employed, or own your own small business, it’s time to calculate and send in an estimated quarterly tax payment. The 2nd quarter estimated tax payment due date is June 16 this year, because the 15th is on Sunday.
Stock Market 2014 Mid-Year
Did you sell in May and go away? If so, you missed out on a rising May market that recovered those losses you locked in from March and April.
The so-called bubble that everyone is talking about just keeps inflating, or maybe the stock market is accurately projecting that the U.S. economy is finally getting ready to get out of neutral and start moving forward. Whatever the answer, the S&P 500 moved into all-time record high territory on Tuesday, cracking 1,911. This coming on the heels of two down months for the markets.
While smaller investors have no need to follow short-term moves of the markets, it’s always nice to know what’s going on. More importantly, it’s very important to remember that just 5 or 6 years ago, everyone was sure that the sky was falling, and that having your money in the stock market was a sucker’s bet. They weren’t right then, and the overly optimistic aren’t right now. Get your money in some good investments and leave it there.
Mid-2014 U.S. Economy
The jobs picture continues to be one of slow growth. While this is certainly better than the opposite, the fact remains that this rate of growth is not sufficient to backfill all the jobs lost during the Great Recession. Full speed U.S. economic growth really isn’t possible until the people that lost jobs get new ones and have some time to build stability around them.
Consumer confidence is finally starting to grow as well. Again, these are small numbers, but they are pointed in the right direction.
However, overall consumer spending was down in April for the first time this year, suggesting that now isn’t the time to get too confident.
Overall, 2014 is shaping up to be a good year for most American’s personal finances as long as they are part of the pool of people with stable jobs. For those still looking, it isn’t getting better fast enough.