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9 Financial Things To Consider Before The New Year

December 2, 2011 · 25 comments

in Personal Finance

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:

  1. 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.
  2. 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.)
  3. 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.
  4. 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.
  5. 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!
  6. 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.)
  7. 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.
  8. 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.)
  9. 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?
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{ 22 comments… read them below or add one }

Penny December 2, 2011 at 7:52 am

Great ideas. I really need to do some decluttering before the new year, and figure out my finances for my last semester.

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Kris December 2, 2011 at 8:56 am

Get to work Penny! 🙂

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MoneyCone December 2, 2011 at 9:37 am

Good reminders Kris! Need to max out my IRA!

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Kris December 4, 2011 at 10:09 am

So did you max it out??

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First Gen American December 2, 2011 at 9:58 am

Hey Kris, did you write this just for me? I have all kinds of dangling paperworky stuff I need to get done..submitting my daycare and flex spending receipts, closing accounts, looking at asset allocation, etc.

Great list.

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Kris December 4, 2011 at 10:09 am

Did you get everything done Sandy? I did write this just for you and Shawn.

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Miss T @ Prairie Eco-Thrifter December 2, 2011 at 11:47 am

Our mission over the next month is to donate and declutter and I am excited. I hate mess and extra stuff. I am a bit OCD when it comes to being organized and neat.
Great list of tips.

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Kris December 4, 2011 at 10:09 am

Our house looked so nice when company came to town. A small tornado seems to have come through again and put a bunch of things where they shouldn’t be though. Once all the Christmas decorations are up though, we can sweep through and make it all nice again.

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Roshawn @ Watson Inc December 2, 2011 at 12:42 pm

Great list of tips. I definitely NEED to decluter. I’ll be doing a lot of this soon. Thanks for making my todo list for me 🙂

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Kris December 4, 2011 at 10:07 am

I am happy to make your todo lists! Next, you need to do all the shopping, make dinner, clean the house and then you can watch some football…

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Krantcents December 2, 2011 at 1:32 pm

I just changed my 403B deduction for next year. The maximum just changed for 2012. I had to do it by December 1st.

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Kris December 4, 2011 at 10:07 am

KC- Don’t you love when all that stuff is taken care of and you don’t have to think about it anymore?

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Kaycee December 3, 2011 at 12:44 am

I am going to declutter up until and after Christmas. Plus I do have to work on saving more money.

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Kris December 4, 2011 at 10:06 am

Do you have a plan for how you will save the money Kaycee? If not, try setting a goal for yourself and structure a plan that will help you achieve that goal. You will be so glad you did a year from now!

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The Biz of Life December 3, 2011 at 9:16 am

After a year of heavy medical expenses in 2010, we over allocated to our FSA this and are trying hard to spend it down before the end of the year.

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Kris December 4, 2011 at 10:05 am

I hope you can use up all that money Biz, but on what you choose, not on a health issue!

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Financial Samurai December 4, 2011 at 11:46 am

I’m going to Goodwill for the 15th time this year to drop off my final bags worth of stuff! FEELS GREAT!

I’m also going to rework my budget and definitely have a firm firm savings plan for 2012. Due to a refinance with my home and rental property, I need to sock away that increased cash flow, b/c I know it would be TOO EASY to just spend it all!

Sam

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Kris December 4, 2011 at 1:03 pm

15 times in one year? Great decluttering! How many trips do you forecast for next year? Did you do major cleaning this year, or do you make smaller trips?

I just refinanced myself and need to write about it.

I think you should put your increased cash flow toward another trip, that last one sounded fantastic!

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Maggie@SquarePennies December 4, 2011 at 9:30 pm

Good reminders! Especially about getting medical appointments taken care of this month. That applies to just about everyone. Happy New Year!

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kathleen December 5, 2011 at 3:26 pm

Quick question — do we have until April to contribute to 2011 IRAs?

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Kris December 5, 2011 at 3:44 pm

You can still contribute to your 2011 IRA until April 16, 2012.

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Pagg Supplement December 31, 2011 at 11:55 am

money is not always in use.

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