The holiday season usually stretches everyone’s finances. In today’s post, we’re offering a few simple moves to ease the pressure and set yourself up for success in the New Year. Assuming you’ve paid off expensive revolving debt (if not, do that first – other people’s money is always expensive), here are the top money moves to make NOW.
1) Make sure that you aren’t too stretched during the holiday season. Plan ahead and put away a small amount every week so you can use your savings to cover the cost of Christmas rather than making the purchases on a credit card. Once you’re in the habit saving, you can continue into the New Year – setting yourself up for good financial health in 2017.
2) Do you have a rainy day fund? Ideally, everyone should have 3-6 months of their salary saved for an unexpected short- or long-term expense, because while we may not know what life will throw our way, it’s a safe bet something will pop up. Of course this can be incredibly difficult to achieve – but every little bit helps. Even a small fund of $200 could cover expenses like your washing machine breaking down or car problems. A rainy day fund gives you security and flexibility.
3) Maximize your 401(k) contributions. Many of us do not have adequate savings for our retirement. If you have a workplace retirement plan, put in the maximum you can afford – or at least what your employer matches. The savings has the additional benefit of providing some tax relief, too. If you are able to start early enough, compound interest will work it’s magic and significantly increase your fund over the course of your career. If you don’t have a workplace plan, investigate other options like IRAs and start paying in the maximum you can afford.
4) If you’re self-employed, get a handle on your taxes before December 31. That way you’ll know if you need to save now to pay it off by April 15 or if it makes sense to move money into an IRA account, donate to a charitable fund.
5) Donate to a charitable organization. If you make a donation to a qualified organization with a tax-id before the end of the year you may be to write it off your 2016 taxes and support the causes you believe in. It’s a win-win.