When the leaves begin to change colors and the year draws to a close, people think about many things: the football season in full swing, apple picking, maybe even a thought or two about finding your rakes before the leaves start to fall all over your lawn. Fall is a great time to think about your finances, too. As the year begins its last act before drawing to a close, here are five things to do to get your finances in top shape for year’s end.
Assess Your Status
Summer’s end is a great time to take stock of your overall financial status. Look back on the goals you had for the year. Have you met them? You still have a little bit of time left, so don’t give up! And don’t just look at your short-term goals, either. Review your earnings, your long term financial requirements, and your overall level of financial peace. If nothing is adding up, then it might be time to think about making some serious life changes – new job, downsizing, selling assets – to make sure you are meeting all of your financial objectives.
Review your Insurance Coverage
Other than paying your premiums or making claims, you likely don’t think of insurance too often. Fall is a good time to review all of your policies and ensure that you are satisfied with your level of coverage. Start with your life insurance policies and ensure that you have the right coverage for your circumstances. This can change as your age, get married or divorced, and more. Next, make sure your homeowner’s policy is up to date. Finally, if you have bought or sold any cars over the past year, make certain that you aren’t insuring a car you no longer own – and that you have sufficient coverage on your new car.
Save for the Holidays
Thanksgiving and Christmas are right around the corner and with them come a plethora of expenses. Holiday gifts, food, travel, and vacation expenses require significant cash outlays at the end of the year. The average household spends nearly $1,200 on Christmas alone. Start saving money as the nights get colder so that you are ready when the holiday season rolls around.
Get Ready for Winter
Now is the time to get ready for winter. Ensuring your house is winterized – basement, walls, and attic insulated, windows, sealed, everything caulked – can provide substantial savings before the first snow falls. Changing furnace filters will help optimize your home heating and reduce costs, and running your ceiling fans in reverse (clockwise) will make your home heat go a little bit further. The savings from all of these moves add up and will equate to less money going to utility companies this winter.
Max Out Your Retirement Account
You have until April of next year to maximize the yearly limit on retirement account contributions, but don’t delay making that deposit anymore. Your tax-deferred IRA, 401k, or thrift savings plan are your post-work future. Verify how much you have contributed thus far for the year and work to maximize your contribution before the deadline.
Fall is one of the best times of the year to get your finances in order. It’s your chance to close out the year on a high note. Do a good assessment of your overall financial status. Determine what you are doing well, where you are falling short, and decide whether or not major changes are in order. Take time to review all of your life insurance policies and ensure you have adequate coverage. If you haven’t already begun saving for the holidays, now is the time to start. Winterize your house to realize savings from energy efficiency, and strive to maximize your retirement account contributions. If you do all of these things, you will close out the fall with peace of mind and you will be ready for whatever the next year holds.
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Its always good to review finances at the end of the year. Well, at any time really but at least once a year. Circumstances are always changing so keeping on top of financial matters is always a smart thing to do.
All great tips. It seems that a lot of people tend to wait for New Years to start assessing their finances but I’ve personally always found autumn to be the best time for all the reasons you mention. Especially saving for the holidays — avoid the January surprise!