The week between Christmas and a New Year toss most of us into a haze. But this is an incredibly important time to shore up finances from the year previous and launch into the next. Don’t miss these 7 Smart Money Moves for both the end and beginning of the year.
End of the Year
Reconcile Your Holiday Spending
Last minute gifts, dinner out on the town, and all of those odds and ends you forgot about are lurking in your expenses. It’s time to use your budget forms or budgeting software to make sure your accounts are aligned. Hacks occur during this time of the year because the thieves know many of us aren’t paying close enough attention to our spending. Go ahead and clean out all of those receipts from your wallet and purse, too.
Contribute to a 529
Did you know that you can set up a 529 (tax-advantaged education savings account) for yourself? If you have kids, this account can help you save for the future, too. It’s important at the end of the year to make contributions to yours if you have one (or set one up and fill it). In the state of Indiana, you receive a 20% tax credit up to $5000. That means you get a $1000 tax credit. Other states vary on tax benefits. But you need to make that contribution before the end of the year to make it count for this tax year.
Calendar & Budget for 2019
Your new year will come at you fast. If you have some spare time in between holidays, it’s the perfect time to see what’s ahead for you. Don’t be deceived, you don’t need expensive planners or software to chart the path ahead. You can print simple calendars or budget forms. It doesn’t have to be pricey.
Personally I LOVE the app Cozi for family calendaring and list making. I only use the free version of it but it gets the job done. I have a very old version of Quicken that I use to do our family budget. Typically, I plan six months at a time.
Back Up Your Data
Before the year ends, do a quick back up of your computer. Just trust me, it’s a good idea. As someone who has struggled with computer crashes in the past, I know how bad losing everything (especially your budget) hurts. Whether you toss things up in the cloud, use an external drive, or use a back up program that automatically runs on a periodic basis. I like the service Carbonite.
Beginning of the New Year
Set 1 Small & 1 Large Money Goal
Without a focus, your money will run amok this year. Begin the year well by setting at least two goals – one small and one larger. For the small goal, you might consider challenging yourself to a no spend month or avoiding dining out for a set period of time. Every year, we choose not to eat at restaurants during the month of January. It takes some extra planning but the results are worthwhile both when it comes to our money and our health.
For a larger goal, consider setting a specific amount to save – maybe you’ll pay cash for a car, pay off credit card debt, or increase your retirement contributions. Marry your short term goal to your long term aim for more efficacy.
Contribute to Your IRA
This is a both/and if you don’t already have an IRA. An IRA or Individual Retirement Account is a great way for you to save for the future. If you don’t have an IRA yet, you need to set one up before the end of the year. If you do already have one or you get yours set up in time, you actually have until April 15, 2020 to make contributions that count toward the previous tax year. Your money grows for the future and you get a tax benefit – win, win.
Do a Financial Declutter
Last year, I challenged readers to declutter their finances with me in a 31 Day Challenge. Each day’s assignment can be done in 30 minutes or less and helps you clean up both your money and your home. I promise it’s painless and you will see results. Join the Financial Decluttering Group on Facebook NOW to get ready.
The new year is a perfect time for you to make a fresh start when it comes to your money. These smart money moves will help you through the next 365 days (366 for the leap year!). Don’t let the holiday haze distract you from using downtime well. Be about the business of preparing for the year ahead.
Our new book Your Money, Your Marriage is now available! Be sure to check out videos on managing money together on Facebook.
My book is now available: Slaying the Debt Dragon: How One Family Conquered Their Money Monster and Found an Inspired Happily Ever After. You can also check out The Debt Free Devotional
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