Looking back on what you have spent helps you to review your spending habits and looking forward helps you to figure out what to do with your money and how you can keep working towards your financial goals.
As the year comes to an end you may need to think of what you can do to make sure your money and your financial goals are on track ready for the New Year ahead. Here are a few steps you can take to get your finances in order:
Increase Retirement Savings
You can always increase your savings rate in your retirement account. In 2015, anyone under 50 can contribute up to $18,000, while those over 50 can contribute up to $6000. You should check your account to see how far off you are for the year and contribute more if you are able.
Match Your Company’s Payments
Checking your retirement account regularly can help you keep on track of your contributions and those of your employer. If you max out your contributions too early you may end up earning less of your employer’s contributions. A better method would be to take a steady approach where you contribute the same percentage from each of your monthly earnings through the year.
Convert To A Roth IRA
If you earn a lower income this year due to a gap in employment then you may consider converting money from a traditional IRA to a ROTH. Roth conversions need to be completed by December 31st and not at the end of the financial year next April.
Look At The Bigger Picture
It’s a good idea to look at your finances and take stock of your situation. If you have made any serious financial changes in the last year like changed jobs or sold your house you may need to change insurance policies or change your saving plans. However your life changes, you should take stock of your financial situation regularly.
Set Yourself Tasks
Once you have an idea about what you need to do you can create a plan of what you need to complete next. Set yourself a task each week to work towards your financial goals. If you work on your tasks weekly it can help you to manage your debts, review investments or understand your overall financial situation. Completing little tasks on a regular basis can help you feel less overwhelmed.
Develop Your Goals
As you work on your goals you may achieve them or you may decide you want to extend or change your goals. Sometimes things happen, you may have an emergency or you may have spare money that you want to put towards an investment.
Balance Your Accounts
In the current economic climate, the market is quite volatile and as the year comes to an end you can use this time to balance your accounts by selling what you have above your target and using the earnings from this to buy what you need in your other investments.
Review Your Spending
Looking at where your money has been spent so far can help you figure out a plan for next year and see if you need to have anything in place that can help with your savings, redirect your funds for travel or manage business expenses.
Prioritize College Savings
The expenses of a new school year and the myriad of different activities that kids want to get involved with including sports and clubs. These activities can rack up thousands of pounds which some parents feel under pressure to spend when really that money can be put towards your children’s future college funds.
Monthly Costs Management
It’s a good time to review your monthly outgoings and see if your providers of utilities and services can offer you a lower rate or way to save money. You can often get a cheaper deal that will still match your requirements by remaining a loyal customer.
Save For Something Special
Working towards something special like a vacation or a new car is something to look forward to and will give you more incentive and a more positive outlook towards saving and sticking to a budget.
Save What You Can
If you get a bonus in your paycheck or have paid all of your social security contributions you could put this money towards your emergency fund or towards your vacation or new car fund.
Save For College
You can contribute a little extra to a college fund either for your own children or grandchildren. Grandparents can contribute up to $14,000 a year but you can pay up to five years in advance so you could pay up to $70,000 into a college fund before you would need to pay any taxes.
Add to Your Emergency Fund
It’s a good time to check on your emergency fund and add to it if you can. It’s recommended to have between three to six months of expenses covered in a separate account that can be accessed to pay for any unforeseen circumstances.
Update Beneficiary Information
Now is a good time to look at your estate and whether anything needs to be changed. If you have been married or obtained other assets you may need to look at your estate and update beneficiary information and entitlements as well as look into how your benefits from your employer may change.
Check Your Insurance
Check your current level of insurance for vehicle and home cover and see if your insurance is enough for your needs. You may wish to look at other types of policies such as liability insurance, disability insurance or other types of insurance that could protect your family and your ability to work.
Get Your Taxes In Order
If you can get your relevant tax information and receipts together and start working on your taxes now, then you can take care of your taxes early in the New Year and benefit from an early refund too.
Tax Credit Deductions
Making purchases on your credit card in December of expenses which may be deductible like home improvements to make your home more energy efficient or certain school expenses can actually be deducted from your taxes for this year.
Donate To Charity
Now is the time to make contributions to charity before 31st December so that it counts towards your 2015 taxes.
Take Care Of Your Health
It’s a good time to book some health care appointments for preventative health care like general health, optical and dental checkups. You have a few months left to spend any leftover money in your flexible health care account.
[Read: 5 Common Money Saving Mistakes]
There are many suggestions in this list, what’s important is that you prioritize what’s important for you, your family and your personal situation. Getting your finances in order and sorting out your taxes will give you a head start ready for the New Year ahead.
And now here 5 Money Moves to Boost Your Bank Account:
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[…] [Read: What Are The Best Money Moves] […]