December is sure to pass by in a blur and before we know it, we’ll be ringing in the new year. I’m sure I’m not the only one who has a monster list of things I should do before the new year to help with my finances for next year. Here are some of the things I hope to get done before 11:59 pm of December 31st.
Donate to Charity
We’re pretty good about giving cash throughout the year but getting around to taking our extra stuff to a charity that can use them? Not so much. The good news is that I’ve been putting away outgrown clothes in containers in the attic. The bad news is that I have to find the time to lug them downstairs and document what’s inside in order to take the deduction. As a freelance writer who already itemizes, even being able to write off $1,000 from my taxes is a huge help.
Not sure if you need to document your donations? A general rule of thumb is that it’s worth it for most people if you’re already itemizing your taxes but if you are taking the standard deduction, it won’t do you any good. If you’re unsure of how you’ll be handling your taxes next year, go ahead and take the deduction. For more information, read Tips for Donating Your Things to Charity.
Charities are fairly overwhelmed with donations this time of year so next year I vow to space out my donations more evenly through the year and save myself this last minute scramble.
Schedule Appointments
This one is a bit trickier to arrange since doctors, dentists and optometrists like to take off for the holidays, too. We have a bit of money left in our flexible spending account that I’d like to use up sooner rather than later as FSA funds are use it or lose it. I believe our plan allows us to claim eligible expenses until March 31 of next year but waiting until the last minute is a recipe for disaster. Additionally, our plan will be fully funded with next year’s allotment on January 1st so we will no longer need to hold anything back in case of emergencies.
Our dental plan has a cap of $1,500 per person that most family members haven’t hit yet. While I’m glad we haven’t needed that much dental work, I’d just as soon schedule as many cleanings and check ups as possible for before the year closes so that those expenses aren’t applied towards next year’s cap. I also haven’t had my eye exam for the year yet or used my allowance for lenses and frames, which would make the premiums we paid this year a total waste.
Set Goals for Next Year
The problem with most financial New Year’s resolutions is that they are too vague. It sounds good to say that you want to save more money or invest more but without goals and planning it’s likely that your good intentions will fizzle into not a whole lot of action.
The end of the year is a good time to go over your financial records and see where your trouble spots are. It’s also a natural time to start thinking about what you’d like to achieve financially in the coming year. Those achievements can be the carrot that keeps you making progress towards improving your weak areas. For example, if you spend too much money at restaurants, you can use your wish for a family vacation as the motivation to cook more at home.
One of the best methods for setting goals is the SMART goals system. In a nutshell, it calls for setting goals that are:
S – Specific. You should be able to clearly articulate what, specifically your desired end result should be.
M – Measurable. What benchmarks will you use to know that your goal has been achieved.
A – Attainable. It’s okay to stretch and aim high but setting goals but stick with ones that have some chance of panning out.
R – Relevant. Is this something that is actually going to make a difference in your life? Is it worthwhile?
T – Time-bound. Goals that come with deadlines are far more likely to be acted on.
So, in our example, a SMART goal would be to decrease our restaurant spending from X amount of dollars to X-Y amount of dollars so that we can save Y in order to have enough money in six months to go to the beach so that we can get some much needed family time.
What do you need to get done by the end of the year? What tasks do you always put off until the last minute?
{ read the comments below or add one }
The SMART goals system is what I use too. I used it successfully to reshape my online business plans last winter and it worked out mostly to my satisfaction over the course of this year.
-Jean
I’ve never really thought too much about what I need to do. For things like charitable donations, Flexible Spending, etc., my work is really good at reminding us to get that stuff done since our new year elections are always due in November/December.
As far as goals, my husband and I usually figure out what financial goals we want to achieve together and then follow the SMART plan to achieve them. We each then come up with our own personal goals and share them with each other as a measure of accountability.
I recommend to my readers that they look at all of their paycheck deductions before the new year. Did their situation change? Are they claiming the right deductions? It is a great time to make changes, including increasing your 401k withholding. It’s also good to look at your healthcare expenses for the year and decide whether or not to contribute to a FlexSpending account.