5 Smart Things to Do With Your Finances Each Year
Are you serious about getting ahead financially? Or, have you put financial focus on the back burner? Do these five things annually to make sure you are getting ahead in the financial game. Here are some suggestions from money experts that can help.
Create a Budget for the Holidays
Avoid spending too much during the holidays by creating an annual holiday budget. Starting a budget early in the year will help you find ways to cut back on spending or save up for those gifts you plan to buy later on. Look back at last year’s holiday spending and create a plan, so you’ll be on track to cover those extra holiday expenses.
Review Your Savings Goals
Your savings goals can vary greatly depending on your life stage and circumstances. Your goal could be saving short-term or long-term. It could be saving for an emergency fund, a vacation, a down payment or retirement. Get organized with a list of things you want to save for, develop a timeline and allocate how much you can save toward your current goal. Revisit your goals frequently to review and track your progress.
Maximize Your 401(k)
Make sure you are contributing to your 401(k). Even if you aren’t able to set aside much right now, try to contribute enough to maximize your employer’s match. If you aren’t meeting the company match, you are missing out on guaranteed money towards your retirement nest egg. Aim to increase your contribution once a year or every time you get a raise. The more you contribute, the faster your retirement will grow while simultaneously lowering your taxable income.
Review Your Stock Portfolio
It’s a good idea to schedule periodic portfolio checks to review and rebalance your stock portfolio. You might want to cash in on winning stocks and sell the losers to offset capital gains. At TFCU, we recommend you check with your financial advisor, as well as a tax consultant, to help you make these important decisions.
Donate to Charity
Making a charitable donation isn’t just a generous thing to do during the holidays. It will also reward you in the end if you take advantage of the tax break it provides. Usually, you can deduct donations of cash or property made to qualified organizations up to certain limits, if you itemize on your federal tax return. Just be sure to get receipts for all contributions and consult an accountant with questions.