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, and 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 workout tips to get your finances in shape by the end of the year.
- 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.
- 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.
- November: 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.
- December: Review Your Financial Fitness. Just as an athlete reviews his or her athletic progress and goals, it’s time for you to review your expected income next year and previous spending. Did you get a raise this year or are you expecting to make less next year? Review your expected income for the upcoming year as well as your necessary expenses and create a new budget based on your new income and expenses. The budget that worked for you the beginning of the year may not help you reach your financial fitness goals in the upcoming year.
- Bonus tip: Get a Jump on Taxes. Use TurboTax or TurboTax TaxCaster to estimate your tax situation before the end of the year so 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. Hopefully your estimate will reveal a pumped up tax refund.
Take on these tips, and I know that you’ll start 2018 trim and fit and in good financial shape.