Five Tips to Get in Good Financial Shape by the End of the Year

Tax Planning

As summer comes to a close and the days get shorter, the holidays seem just around the corner. This time of year, many of us begin to worry about gaining weight later in the year.  To prevent weight gain, you may have vowed to get more exercise this winter. How about extending that fitness regime to your finances? Here are some financial workouts tips to get your finances in shape by the end of the year.

  1.  September: Put Your Spending On A Diet. Carrying too much debt is as exhausting as carrying extra weight. Reducing your intake is key to losing weight, but the key to slimming down debt is to reduce your outflow.  If you have trouble controlling money in just a few categories, such as clothing or entertainment, create a finely detailed budget for just these categories. Make a list of twenty things you can do to trim your spending without feeling deprived. Getting control before the holidays set in will help you sail through financially unscathed.
  2. October: Stretch Your Retirement Savings. Saving for retirement is similar to an exercise program — the more you put into it, the more you will get out, and regular investing is key. Sign up to contribute $25 or $50 more of each paycheck into your retirement plan. If you are already maximizing your plan contributions, consider a deferred annuity. You won’t get a current tax deduction for the money you invest, but you won’t have to pay tax on the earnings until you withdraw the funds in retirement.
  3. November: Use A Financial Adviser to Keep Investments On Track. Just as a personal trainer can help you get the most out of your workouts, a financial adviser can help you keep your investments on track and stay invested when your natural inclination is to cut and run. 62% of working-age women consult a financial adviser when making investment decisions. Less than half of men do the same.
  4. December: Pump Up Your Credit Score. Some of the factors that affect your credit score, sometimes called your FICO score, are delinquencies, accounts opened during the last year, balances on revolving credit that are near limits, tax liens, judgments or bankruptcies, recent credit inquiries, and too few (or too many) revolving accounts. Financial tools like Mint can help you monitor and pump up your credit score.
  5. Bonus tip: Get a Jump on Taxes. Use TurboTax to estimate your tax situation before the end of the year. If your estimates show you will owe taxes you can use estimated tax forms to prepay your taxes and garner a tax deduction for 2016. You can take other steps to reduce your taxes before year end, such as cleaning out your closets and donating unwanted goods to charity, and prepaying tax deductible expenses such as property taxes and donations.

Take on these tips, and I know that you’ll start 2017 trim and fit and in good financial shape.

 

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