Oh, 2015, where did you go? It seems only moments ago it was time for New Year's resolutions, and now here we are again. With only a month left before another year is behind us, you may be wondering how best to maximize this year's finances. Well, look no further!
1. Prepare for taxes.
Hopefully, you've already started to put the year-end tax-planning 2015 checklist to good use. But here's another item: If you pay taxes quarterly, make sure you send in that final payment — and, ideally, save a little bit extra if you think you might owe. (It seems like I always end up owing just a little more than I projected.)
2. Go to the doctor/dentist/eye doctor.
This step is especially vital if you have a flexible spending account, or FSA, which allows you to set money aside pre-tax for health-related expenses but which has limited rollover capability (a maximum of $500 if your employer participates). But even if you've been paying for insurance and still have benefits you haven't used (say, an eye exam and new lenses, or a teeth-cleaning), it's still good to squeeze those appointments in before year's end.
3. Evaluate your health situation and health plan during open enrollment.
If you were in the situation above where you were potentially leaving benefits on the table, maybe you can switch to a high-deductible health plan to align your payments with the level of use you anticipate. Or maybe a recent diagnosis or plans to add to your family mean you need something more robust next year.
If you have a health savings account (HSA) and can afford to max it out, good on you — those roll over indefinitely. If you have an FSA, now is the time to adjust your contributions for next year so you don't risk losing money. If you just got new glasses, maybe you skip vision insurance for next year, etc.
4. Finalize your charitable contributions.
Not only is this good to do for tax purposes, but now is the time of year when the demand for many charities' services is most overwhelming. Help your fellow man (or animals, or whatever your charity of choice may be) and give back.
Or maybe you've crunched the numbers and the money's just not there. But that doesn't mean you've got nothing to give! If you go through your belongings, maybe you can identify clothes, books, or nonperishable food items you no longer need or want. Free up some space in your closets and shelves and pay it forward at the same time.
5. Revisit your resolutions and goals.
In late 2014, we made a list of prioritized home improvement projects to tackle in 2015. We accomplished two of the four goals, did some research, and set longer-term goals for the remaining two. Did you set goals that you haven't accomplished? If you're close — say, you wanted to max out a retirement account, squirrel away a certain amount in a high-yield online savings account, or pay off a particularly pesky debt — can you squeeze your budget a little tighter and reach it by year's end?
6. Set a holiday budget — and stick to it.
Nothing starts the new year off on a sour note like a spending hangover due to holiday binge-spending. By now you probably have a good idea of your personal and professional commitments. Decide how much money you are willing to allocate toward your participation and stick to your guns. Not only will your bank account balance thank you, maybe you'll give a colleague or loved one the courage they need to set their own limits. Now that's the gift that keeps on giving!
7. Make exchanging gifts easy (and cheap!) on your loved ones.
Even if you're not into the whole gift-giving tradition yourself (personally, receiving gifts makes me feel really awkward), sometimes there's no easy way to back out. For example, my husband's family is really into the whole gift-giving scene. So I make sure my wish list is packed with relatively inexpensive items I know I'll get use out of:
- Hair ties
- My favorite lip gloss
- Hot hands hand warmers (seriously, my office gets SO COLD)
- Candy (I love Warheads, and a bag of these lasts a long time because if I eat more than one a day I burn my tongue)
For parents/grandparents, a photo book (or something similar) is relatively inexpensive and keeps the focus on family while making and cherishing memories.
8. Pitching in with others on gifts can help you stay on budget.
When it comes to giving gifts, going in with several family members may mean you can get someone something more expensive than anyone could afford on their own. That way everyone stays on budget.
9. Review spending trends to identify cash-flow leaks.
Did grocery spending spiral out of control in the second half of the year? Or maybe you started hitting the drive-through a little too often. If you've been collecting detailed financial data throughout the year, analyze it and look for other signs of financial leakage.
For example, gym memberships surge in January; but if you signed up last year and haven't been going, take this opportunity to cut the cord instead — ditto with cable or other subscription services you don't use or need.
Change is hard, but if you can identify the psychology behind your bad habits, you're one step closer to replacing those habits with better ones.
10. Set yourself up for success at work.
Just another friendly reminder that it's performance-review season at work. So spend some extra time buckling down and being really strategic before you ask for a raise. Earning more money isn't a short-term fix; it's a financial victory that will put you on improved financial footing for years to come. At least, that is, as long as you spend or save that additional money mindfully rather than leaping on the hedonic treadmill and giving in to the siren song of lifestyle inflation!
Some of the items on this list are technical, some are time-consuming or otherwise complicated, and others are a cinch. They run the gamut from taxes to holiday parties because money touches every aspect of our lives, and it's important to take everything into consideration if you want to reach your financial goals. Best of luck as you maximize your year-end finances to reach your goals!
What's on your to-do list for maximizing your end-of-year finances? Share your tips in the comments below!
Honey Smith has been reading GRS since at least 2008, right when she got her first â€œrealâ€ job and started getting serious about finances. She and her husband Jake are in their mid-30s and recently bought a home together. Currently, she manages graduate programs at a large state institution, and he is an attorney at a mid-sized firm.
Between them, they have paid off approximately $30,000 in consumer debt since she started writing for GRS in 2012. However, they still have nearly $200,000 of student loan debt, so she will continue to chronicle their debt-paydown journey. In addition to personal finance, Honey is interested in vegetarianism and cooking, gardening (despite living in the desert and having a black thumb), issues in higher education (including the student loan bubble and the slow death of tenure), and animal rights; however, her heart lies with fantasy novels, trashy TV and Skyrim.