9 Financial Things To Consider Before The New Year

Each year, many people create goals. Sometimes people start out strong and attack their goals immediately. Quite often though, that enthusiasm wanes as the year goes by, and old habits start to sink in.

Next thing you know, it is December, and it seems like there is no way to make up for lost time.

Ah, but there is still time!

Sure, there is only 1/12th of the year left, but there is so much you can accomplish in the next month!

Things you can do to end your year on a good financial note:

If you have satisfied your medical deductible for the year, get any ‘discretionary’ medical things done this month, such as physicals, mammograms, medical tests, etc. This will benefit not just your bank account, but your overall health as well. If you have Flexible Spending Account (FSA) money left in the account, SPEND IT NOW. You cannot get money back that you have put into a FSA for the year and have not used. (Health Spending Accounts, or HSAs, allow leftover money from one year to be rolled over in to the next year.) Deposit money into 529 plans, especially if your plan provides income tax benefits. We belong to the Michigan 529 plan and we can deduct up to $10,000 in contributions a year from our Michigan State income taxes. Catch up on Roth IRA and 401k plans if you can. If you are not currently maxing out your contributions, sit down and really think about raising your contribution amount for next year. You can’t (shouldn’t) spend what isn’t direct deposited into your checking account, so try your best to get used to spending less. You will be so grateful you did when it comes time to retire. Donate! Declutter the closets and toy chests and give everything away that you has not been touched in the last year. Also consider making financial contributions too, there are plenty of worthwhile organizations out there that could use some extra donations! Consider selling bad investments. If you own some stocks that have done nothing but underperform, consider selling them to offset any gains you have for the year. (Good for you if you have a lot of gains, the market has been pretty flat overall this year.) Make a firm savings plan for next year. Only you know what makes you ‘tick’. Formulate a financial plan now to ensure you will save as much money as possible during the upcoming year. If you know that you spend more at Target because you have a credit card at your disposal, then consider cutting that credit card up. Talk to a spouse/significant other about your spending habits and have someone agree to hold you accountable to your new savings plan. Get organized and evaluate asset allocation. Has it been years since you cleared out your ‘investments’ file? Has it also been years since you looked at what type of investments you have and if your stock/bond/annuityetc allocation is appropriate for your age? Nobody wants to think about getting older, but nobody wants their net worth to suddenly plummet with a stock market crash if they are going to need the money soon either. (Well, nobody wants to lose money in a stock market crash, but it is even worse if you need the money before there is time for a market recovery.) Make your financial goal visible. Are you saving for a trip to the Bahamas? Then put pictures of your dream destination on your refrigerator, download a picture that can be used as a screen saver on your computer, put a small picture in your wallet, etc. If you have visual reminders of your ultimate goal, it may help curb your spending on discretionary items.

Do you plan on making any financial changes for the coming year? Or, are you pretty organized and feel comfortable with your savings already?