Fall is my favorite time of the year. It’s almost beautiful everywhere, and it’s a little lull before the chaotic (and expensive) holiday season. We look at the pretty fall foliage instead of staring at store racks, trying to find gifts for everyone. It’s also a time where people put away their vacation mementos and become a bit more action-oriented, especially on their finances.
5 Money To-Do’s This Fall
The end of the year will be here before you know it and this is your chance to make sure you ring in 2015 on a happy, financial note.
1. Review Progress Against Your Goals
Whether you choose to review your goals monthly or quarterly is up to you, just make sure you do it consistently. Too often I see people go through the work of creating goals, to only ignore their progress. Goal achievement doesn’t happen without you paying attention in most situations. You need to evaluate your progress regularly and make adjustments as needed. Are you still on track to hit year-end goals? How about your long-term goals, such as retirement?
If you’re not on track, what happened? I don’t ask to put you down or make you feel bad but so you can assess where you went off track.
- Were you too aggressive with your goals or not aggressive enough with your saving/investing efforts?
- Did you try to do too much at once (this happens frequently) and need to pare back your goals to the ones that mean the most?
There is nothing more motivating than achieving your goals and nothing more defeating than not. Figure out what you need to do to end this year on a positive note and ready to repeat your goal success in 2015.
2. Maximize Your Employee Benefits
Fall is commonly open enrollment in most businesses. It’s easy to get in the habit of automatically re-enrolling in our various benefits plans, but I encourage you to slow down and make sure they make sense for you. Some businesses offer multiple options for health and dental plans and make sure you’re not over or under paying for the services you use.
Review and Use Your Health Savings Plans
Many flexible savings plans require you use it or lose it before year-end, so take the time to see how much money you have left in your account and start making appointments. Don’t wait until the end-of-the-year to do it either. It may be hard to squeeze in the appointments during all your holiday festivities, and you’ll be competing for limited spots with everyone else who waited until the last minute.
Plan for 2015. Did you save too much or not enough? Are you expecting an increased or decreased need for next year? Adjust accordingly. And if you plan to decrease the amount you save, please consider diverting the money to your savings and/or investment accounts automatically, rather than put the extra money back in your pocketbook. You’ll bump up your savings without even noticing it.
Review and Balance Your 401k Plan
Take out your 401k statements and chart your growth. Are your funds doing well or is their performance lacking? Be reasonable with your expectations and make appropriate choices that reflect your risk tolerance, time horizon and goals. The markets are doing well at this moment, which can lead people to invest beyond their risk tolerance, chasing bigger growth. If you’re not already contributing the maximum amount ($17,500 or $23,000 for those 50+), can you increase your contribution amount another percent or two?
Bonus Tip: Don’t forget to update your beneficiary forms. We may joke about benefits going towards exes or Moms, but it happens more frequently than you think. Take a minute and make sure they are correct. Beneficiary designations override wills.
3. Prepare for Your Year-End Performance Review
Now this may seem initially out of place, but think about it for a minute: What is the outcome of a good performance review? Hopefully a good raise and maybe even a bonus. I’ve given plenty of performance reviews during my career. Those who are able to demonstrate the value they add to an organization succinctly are often the ones who receive promotions, raises and bonuses. Make it easy for your leader to advocate on your behalf (and in turn make them look good, which only helps their own performance review).
What to Do with Your Pay Raise and/or Bonus
Businesses vary on how quickly pay raises go into effect and bonuses are paid out, but let’s plan for them now. You won’t know the exact number, but you may be able to do a conservative guess-estimate from previous years. What really matters, however, isn’t the amount you receive (okay, it matters a little bit! ) but what you do with the increase. I’m not opposed to some mindful lifestyle inflation, but any pay increase/bonus should first go towards debt, retirement savings (if you are below where you should be), emergency fund (to establish or replenish, if needed) and other high-priority goals, such as a kids college education, new home fund, etc.
4. Create Your Holiday Budget
The stores are already starting to set-up their holiday displays, which seems a bit early to me. But it’s definitely not too early to plan for the holidays and put your budget into place, so that you can enjoy the festivities without creating debt. Debt is the last gift you want to give yourself this holiday season.
How Much Will You Spend on Gifts?
Just like Santa does, make a list of who you plan to buy gifts for this year and how much you plan to spend on them. Don’t get caught up in “playing keep up” either. Spend what you can afford and don’t feel bad if it’s less than what they spend on you or your children. It is not a competition. A great gift is a heart-felt one, which does not mean it needs to break the piggy bank or max out your credit card. Most importantly, be sure to stick to your gift-giving budget. It’s a slippery slope once you start spending more than you intended.
How Much Will You Spend on Travel?
There is a lot of hustle and bustle during the holidays. People forget to boost their gas budget (and overall travel budget) for the holidays. Think ahead this year. Beyond your normal schedule, where else will you be traveling to? Set aside an appropriate amount for gas, food and lodging (and don’t forget about taxis, rental cars or parking garage fees if traveling by air) so going to Grandma’s house doesn’t break your budget.
How Much Will You Spend on Food?
Our grocery bills tend to also skyrocket during November and December as Thanksgiving, Christmas and New Years are very food-based holidays. Even if you’re not hosting events, you will still likely bring a dish to share, a bottle of wine or make/buy holiday cookies and treats. If possible, spread out some of the cost and stock up on items that will keep or can be frozen. Look for coupons and sales to take advantage of now, although many of the more traditional items (such as turkeys and hams) are priced better closer to the holidays.
Bonus Tip: I recommending adding a bit of a cushion to your holiday budget. It always seems like that I forget a gift or two. Or other miscellaneous items like stamps for holiday cards.
5. Plan for 2015
It is still a few months away but doing a little planning now, can help you jumpstart 2015.
Look for Ways to Lower Your Taxes
No one likes paying taxes but they are a fact of life. However, it doesn’t mean there aren’t ways you may be able to reduce what you owe come April 15. Do you have some poor performing stocks in your investment portfolio? Perhaps it makes sense to sell them at a loss. Or increase your pre-tax retirement savings by maxing out your 401k contributions. Or increasing your charitable donations. Be strategic and you may be able to lower your tax bill. Have a discussion now with your financial advisor, accountant and/or tax attorney to discuss ways you can lower your taxes.
Plan Next Year’s Vacation(s)
Sit down with your spouse and chart out next year’s vacation(s). Now when the calendar rolls over to 2015, you can lock-in those dates on your employer’s calendar and ensure you have those days off. Plus, it will give you plenty of time to save for your vacations and give you a good answer when your kids get the “I wants”.
Identify Some Preliminary Goals
I know, I know. You haven’t even completed your 2014 goals, but it’s never to early to at least start thinking ahead. Don’t get carried away and forget about this year’s goals, but spend a little time thinking about what you want to achieve next year. What you will do differently? It will make it more exciting when the clock strikes midnight on December 31 if you have an idea of what 2015 will bring to you and your family.
What financial moves are you planning to make this Fall?
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