4 Simple Financial Things I Plan To Do Before Year End

by Ron Haynes


macys window displayWith the onset of the Holiday and Christmas seasons, it’s easy to focus all my thinking on shopping for gifts, going to parties, baking (and eating!) cookies, the hustle and bustle of Black Friday, and spending time with family and friends. My wife and I were looking at our schedule and from the first of November to the second weekend in January, we’re swamped with things to do but I’m adding just a few more that are just as important, but more in a financial sense. And they’re simple to do!

I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over. –Warren Buffett

1. Get ready for tax season

I always estimate my taxes during the month of December so I can make any decisions about minor medical procedures. If I think I will only be “close” on being able to deduct my medical expenses, I will go ahead and have either my wife, my children, or myself get their checkup, flu shot, or other procedure done before year end. This can include dental care, vision care, or other medical care.

If you have a flexible spending account for health care, you’ve hopefully been saving a little bit here and there each paycheck. Most plans are “use it or lose it” so you’ll need to spend the money you’ve saved in the account by the end of the year or you lose all of it. Check with your human resources or payroll department to see how much money you still have left in the account, what expenses are allowed under your employer’s plan, and then use what you have saved up by the end or the year so you don’t lose your hard earned dollars.

I’ll also look at making charitable contributions to help reduce my taxable income since I itemize.

2. Contribute to my retirement savings plan

In my case, I have a Roth IRA as well as an Employee Stock Ownership Plan (ESOP). Under my company’s particular ESOP plan, employees do not contribute to it but the company does on behalf of each employee based on the company’s profitability for the year.

The maximum 401(k) retirement savings contribution limit for 2008 is $15,500. If you are participating in a 401(k) savings plan at work, check with your payroll department to see how much money you’ve contributed this year. If you haven’t reached the maximum limit, ask if you can make a one-time contribution toward your account or consider whether you could increase your per paycheck contribution by just a little though year end. Every little bit counts!

3. Save any cash gifts or found money

If you expect to receive any cash gifts, a year end bonus, or other “found” money, use my sneaky savings strategy to bank that excess cash into a savings account. Once the holidays are over, you can use the money to pay down high interest debt, save money for college, paying off a vehicle loan, or making an extra payment on your mortgage.

4. Review where we are on our budget

2008 had a lot of surprises from a budget perspective. We had surging fuel prices followed by an incredible drop. Food prices went through the roof but I doubt they’ll come back down to earth. I haven’t reviewed our budget to make any really significant changes in the past few months, so I plan to check where we are with our debt reduction plan, our mortgage repayment plan, and our savings plan.

Taking just a few minutes to do these simple things will help me make sure that 2009 goes as smoothly as possible from a financial standpoint.

What steps do you take to at the end of the year to prepare for the next?

photo credit: killrbeez

[tags]year end, money, finances, taxes, finance, investing, personal finance, investment, financial, tax, credit, savings, budget, financial planning, debt, credit cards, mortgage, cash, tax time, retirement planning, saving money[/tags]

About the author

Ron Haynes has written 988 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.