7 Tips to Improve Your Financial Year

Tax Planning

Every year, without fail, my local gym gets absolutely packed around the start of the year. All the people looking to lose a few pounds as part of their New Year’s resolutions come into the gym. Within a few weeks, they start to thin out. By February and March, all is back to “normal.” The reason why resolutions fail is because we try to make huge drastic changes in our lives and very few of them stick. This year, I want to suggest a few smaller, less drastic changes, that will help you both financially and in life.

By making these small changes today, you can have a big impact on the year and, should they stick, a lasting impact on your life.

Tweak Your Withholding

If you get a tax refund check each year, you might want to tweak your withholding and stop giving Uncle Sam an interest free loan each year. The average tax refund last year was nearly three thousand dollars – would you like an extra $250 of your own money in your own pocket each month? Of course you would. Use the IRS’s withholding calculator to find out how you can adjust your answers on the W-4.

Exercise More

This is a common New Year’s resolution but it definitely pays to start exercising more and taking better care of your body. People who lose weight and increase their fitness level report having more energy and better moods. It can have a positive financial effect too, as life insurance rates drop for people who are healthier.

Try a New Hobby

A new year means new opportunity, why not make this year the year you try something new? Maybe there’s a hobby you’ve always wanted to try but just couldn’t find the time? When choosing a hobby, be sure to find a way to “test” it out before you throw yourself 100% at it. Some hobbies require a lot of up front cost while others can be introduced little by little. The last thing you want is additional clutter from all the abandoned hobbies you tried!

Get Your Tax Documents Ready

It’s too early to file your tax return but certainly not too early to get your papers ready. Employers aren’t required to mail out W-2 forms until the end of January so you have a few weeks before you should start looking your mailbox for them. Until then, get everything else ready so that you can electronically file your tax return the moment you receive those last few documents. If you have due a tax refund, there’s no reason to wait until April 15th to file.

Opt Out of Marketing Mail

Go to OptOutPrescreen.com and have your name removed from marketing mailings. This will significantly reduce the amount of preapproved credit card offers and other financial junk mail you will receive and help protect your identity. Thieves can’t steal your mail if you reduce the amount of sensitive mail you receive. If you have an existing business relationship with a company, call them and ask to be removed from their internal marketing mailing list. For example, if you have a company’s credit card, they have the right to send you marketing mailings because you already have one of their cards. Opt out today and you won’t have to do it again for five years (or forever if you prefer).

Plan Your Retirement Contributions

All too often we wait until the end of the year to start thinking about tax reduction. One of the best ways to reduce your taxes and set yourself for a more comfortable financial future is by saving for retirement. Unfortunately, planning for retirement is very difficult to do last minute. Where are you going to come up with a few thousand dollars to put into an IRA? That’s why it’s important to plan at the beginning of the year so you can spread your contributions out over twelve months. You can contribute $1,000 towards retirement by putting a mere $84 a month.

Work Less, Enjoy More

Finally, learn to work a little less and enjoy what you have. Did it feel like the entire year flew by too quickly? When you look back, are your memories filled with fun times with friends and family or filled with days stuck at the office or on the job? If you’re one of the lucky few who have a balanced mixture of both, good for you. If you don’t, learn to add a little balance. You’re working hard for a reason, to support yourself and your family, learn to enjoy the fruits of your labor before it’s too late.

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