7 Tips for End-Of-Year Financial Planning
By Barbara Pronin, RISMedia Columnist
As the end of the year approaches, it’s time to review your last-minute tax and spending strategies and plan ahead for next year. A panel of financial planners suggests seven end-of-year tasks that probably belong on your checklist:
Donate used goods or money – This is the time to clean out your closets and make donations for which you may claim a tax deduction. The same is true for cash donations to charity.
Use expiring medical coverage – If you have a flexible spending account, get your eyes or teeth checked now or see your other medical providers to use up any coverage that may expire at the end of the year.
Adjust your withholding - If you got a big refund last year, and have similar income and expenses this year, consider reducing your withholding. This will put more money in your pocket each month for savings or unexpected expenses.
Look at your debt – Are there credit card balances you can move or consolidate to reduce or eliminate finance charges for at least some period of time? Can you adjust spending to commit additional funds toward repayment of debt? Have your built up enough equity in your home to eliminate PMI?
Check your 401K or investment portfolio – Consult with your financial advisor to determine whether you should increase contributions, rebalance assets, or sell underperforming stocks.
Review your insurance – Check the person or people you’ve named for your retirement accounts and insurance policies. Did you have a death, birth, or divorce this year that could change the beneficiaries?
Curb your holiday spending – Before you head to the mall, determine to stick to a predetermined gift-giving budget. It’s as good a time as any to adjust your financial mindset to consider saving or paying off debt before laying out cash or adding to your credit card balances.