5 Money Moves to Make Before Year End

by Miranda Marquit · 0 comments

making a move
Here comes the end of the year. Are you ready financially?

I’ve been lax in paying attention to my finances lately. I’ve been slow to reconcile my accounts, and I haven’t done any planning to see where I stand with some of my goals. It’s been that crazy around here.

Now that it’s November, though, I’m changing my tune a bit. I know I need to change things up and get my finances in shape for the end of the year.

If you’re wondering what to do with your money now, then this article is for you. Here are five moves that can position you for the coming year:

1. Review Your Retirement Contributions

Are you putting enough away for retirement? Now is a good time to check into that. I double-checked to make sure I’m maxing out my Roth IRA. I should also be able to start putting money into a 401(k) soon, and that’s something I’ll need to plan for.

Make sure you put aside what you can for your future. A tax-advantaged retirement account is a great way to go because it increases the efficiency of your earnings, and might even get you a bit of a break on your tax bill now.

2. Spend from Your Flex Account

If you have a Flexible Savings Account (FSA), you need to use your money or lose it. This is a great benefit, and comes with a tax deduction, but if you still have money left over and don’t use it for a qualified expense within a certain amount of time, you could lose the money.

Look at your FSA and see if you can spend that money on something that qualifies, like eye exams, new glasses, some medical procedure you’ve been waiting on, or dental work.

3. Harvest Your Investment Losses

You shouldn’t sell an investment lightly. However, you can take advantage of the losers in your portfolio. Consider selling some of the losing investments and deducting the loss before year end. Your investment losses reduce your income by the amount you lose, which helps, especially if you made more money this year than last year. Just be careful to avoid getting caught in the “wash sale rule” from the IRS. If you sell a losing investment, you can’t buy it back within 30 days.

4. Donate to Charity

This is a great time of year to donate to charity. Clean out the house and donate items in good condition to a charity thrift shop. This way you can claim a deduction for charitable goods while helping a worthy cause. You can also get a tax deduction for cash donations you make. Just be sure to get a receipt from the organization so you have it for your tax records, and be sure to itemize on Schedule A of the federal tax return.

5. Review Your Budget

Now is the time for a budget review. How are things going with your budget? Are you on the right track? What’s worked well this year? What hasn’t? Be honest about how the budget is working. You might need to tweak the specifics before the new year so that you are ready to hit the ground running.

Editor's Note: I've begun tracking my assets through Personal Capital. I'm only using the free service so far and I no longer have to log into all the different accounts just to pull the numbers. And with a single screen showing all my assets, it's much easier to figure out when I need to rebalance or where I stand on the path to financial independence.

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