Organize Your Finances Before the New Year
Last night I spent a couple hours digging through our finances before the years end. There are plenty of good reaons to do this a couple times a year, but for me it’s the property tax adjustments that force me into it before Jan 1.
I’m one of the few who opted out of paying my property tax through my mortgage every month and instead recieve a direct bill from the county I live in each year. I do this because I would rather put the money for my taxes in an interest bearing account so it can earn money until the amount is actually due, opposed to basically paying your taxes in advance through your mortgage. Because I do this manually, I have to adjust each year to make sure I’m putting enough money away each month to cover the end of the year bill, our taxes go up incrementally ever year to adjust for the homes value (which is assessed every three years).
The point of this post is not to bore you with the details of my property tax bill, rather to give you an example of December strategies you should be taking now, to avoid financial headaches down the road in 2009. Consider the following practices to get ready for the new year.
- Adjust IRA contributions to max out for the year.
- Use the remaining cash on employer sponsored health care pre-tax cards.
- Organize your savings distributions. Can you afford to put away more? Should more money be going to a high interest credit card?
- Start filtering money into savings to cover entire insurance bills rather than pay monthly and face a “billing” charge each month. In addition, this strategy will allow you to earn interest.
- Create a reasonable budget for the new year. You can’t start Jan 1 to begin a new budget, get a plan in place before you set your new years resolution and start the year on the right track.
- Organize/adjust your portfolio. Although a total revamp is probably a bad idea, it can be helpful to make sure your risk level is still at a comfortable level.
- Give your self a financial reality check. Examine your bills and general expenses. What can you eliminate–are you really watching HBO that costs $15/month?
- Do you anticipate a refund from your taxes this year? Start putting together responsible plans for putting it to work for you. For me, I’m not tempted to blow my refund on “stuff” when I have a plan with an end result better than the instant gratification of a shopping splurge. $
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