After a year of working hard and saving for your future, you’ll want to make sure that your assets are protected and that you’re maximizing their benefits. As part of your planning process, you’ll also want to tie up any financial loose ends that could trip you up down the road. Here are a few easy tips that will make sure that you end 2013 on a positive financial note so that you’re set up for success in the New Year.
Re-familiarize yourself with your credit report
Before you start swiping for the holidays, it’s a good idea to know where you stand, credit-wise. Many of us have a good idea of our credit score, but nasty surprises can be nipped in the bud or avoided altogether by knowing what’s in your actual credit report. Annualcreditreport.com is a great place to access your report once a year from all three of the major reporting bureaus, and it’s completely free. Set up by the Federal Trade Commission (FTC) to help consumers keep track of their credit history, this tool will allow you assess your complete debt picture. I suggest that you set aside time to consider your current spending habits and rein them in now, since they can easily spin out of control during the holidays.
Create a holiday budget
This ties in closely with my last tip. The biggest reason why people overspend during the holidays is not having or sticking to a spending budget. A good time to start budgeting for your holiday expenses is early to mid-October. By planning early, you will not only be able to budget for Halloween, but you will also put yourself in position to get an early start on your holiday shopping. Organizedhome.com has a great holiday planner that will easily get you on the right track. Sticking to your budget during the last few months of 2013 will pay dividends into the new year.
Decide on your 2013 tax deductions
It’s always a good idea this time of year to spend some time with your accountant if there have been any changes to your tax situation from the prior year. They can also help you anticipate if your tax rate might increase or decrease in the next year. The consequences could be significant either way. For example, if you were laid off from your job and would receive a large severance, you may want to set aside funds in anticipation your tax bill. Don’t wait until April 15 to realize that changes should have taken place before year’s end.
Make an extra mortgage payment
If you can afford it, making an extra mortgage payment each year will save you a ton of money in the long run. By making just one extra payment a year, over time you can significantly reduce the principal amount you owe. I suggest that you consult your financial planner and decide together whether or not this is a viable option for you and your situation.
Review your retirement planning
If you haven’t already maxed out your 401k contributions, now may be a great time to increase your participation before the year ends. By adjusting the deductions from your last paychecks in the final quarter of the year, you can add significantly to your 401k before the December 31st deadline. Making these decisions during your end of year planning can help prevent it from slipping through the cracks later on.
The key to a successful start to 2014 is intelligent planning in 2013. With the chaos, stress, and expenses of the holidays, it is always a good idea to get a grasp on your financial situation before they arrive. By incorporating these tactics into your end-of-the-year financial planning, you will ensure that the close of your fiscal year will be a strong one.
Maloon, Powers, Pitre & Higgins, LLC is a Registered Investment Advisor. Securities offered through Financial Telesis Inc. (Member FINRA/SIPC). Financial Telesis Inc. and California Financial Advisors are not affiliated companies.